Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Cohen & Steers (NYSE: CNS) and the best and worst performers in the custody bank industry.
Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.
The 13 custody bank stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 5.6% on average since the latest earnings results.
Cohen & Steers (NYSE: CNS)
Founded in 1986 as a pioneer in real estate investment trusts (REITs), Cohen & Steers (NYSE: CNS) is an investment manager specializing in real estate securities, infrastructure, real assets, and preferred securities for institutional and individual investors.
Cohen & Steers reported revenues of $136.1 million, up 11.8% year on year. This print fell short of analysts’ expectations by 0.6%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $75.37.
Read our full report on Cohen & Steers here, it’s free.
Best Q2: Voya Financial (NYSE: VOYA)
Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE: VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.
Voya Financial reported revenues of $1.9 billion, up 2.2% year on year, outperforming analysts’ expectations by 13.5%. The business had a stunning quarter with a beat of analysts’ EPS estimates.
Voya Financial delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.7% since reporting. It currently trades at $75.81.
Is now the time to buy Voya Financial? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: Franklin Resources (NYSE: BEN)
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Franklin Resources reported revenues of $1.59 billion, down 3.7% year on year, falling short of analysts’ expectations by 18.8%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Franklin Resources delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 7% since the results and currently trades at $25.64.
Read our full analysis of Franklin Resources’s results here.
Northern Trust (NASDAQ: NTRS)
Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.
Northern Trust reported revenues of $2.00 billion, down 26.4% year on year. This result surpassed analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also recorded a beat of analysts’ EPS estimates.
Northern Trust had the slowest revenue growth among its peers. The stock is up 3.9% since reporting and currently trades at $131.47.
Read our full, actionable report on Northern Trust here, it’s free.
SEI Investments (NASDAQ: SEIC)
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ: SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
SEI Investments reported revenues of $559.6 million, up 7.8% year on year. This print missed analysts’ expectations by 0.7%. In spite of that, it was a very strong quarter as it produced a beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $90.52.
Read our full, actionable report on SEI Investments here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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