BNY Gains 35.4% YTD: Should You Add the Stock to Your Portfolio Now?

The Bank of New York Mellon Corporation BNY stock has performed remarkably well so far this year. The stock has rallied 35.4%, outperforming the industry’s 21.1% rise and the S&P 500 Index’s 12.3% growth.

Even if we compare BNY’s performance to its peers like BankUnited Inc. BKU and KeyCorp KEY, it appears that BNY has outperformed both. Year to date, the BKU stock has gained 3.7% and KEY has appreciated 5.9%.

YTD Price Performance

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Does the BNY stock have more upside left despite recent strength in price? Let us find out by looking at its fundamental strength and growth prospects.

Key Positives of BNY

Strong Spread Income: BNY has been witnessing an increase in net interest income (NII) over the past several years, supported by reinvestment at higher yields, balance sheet growth and stable deposit trends. While the metric declined in 2020 and 2021 because of low interest rates, it saw a six-year (2019-2025) compound annual growth rate (CAGR) of 7.6%, with the uptrend continuing in the first six months of 2026.

Likewise, its net interest margin (NIM) has been increasing since the second quarter of 2024. Supported by relatively high rates and gradually stabilizing funding costs, BNY’s NII and NIM growth are expected to continue in the near term.

Management expects NII to increase 12-13% year over year in 2026.

Improving Platform Execution: BNY's platform operating model is increasingly contributing to organic growth. With the activation phase completed in the second quarter of 2026, the company is focused on realizing the benefits of operating as One BNY.

The new commercial model has produced 14 consecutive quarters of year-over-year sales growth, with record sales in the first and second quarters of 2026. Average deal size in the first half of 2026 rose more than 20% year over year, and clients buying from three or more business lines increased more than 60% over three years.

These trends highlight the company’s improving cross-selling capabilities and growing emphasis on integrated client solutions, supporting more durable revenue growth. Reflecting this momentum, the Zacks Consensus Estimate for revenues implies a year-over-year increase of 11.1% for 2026 and 4.7% for 2027.

Revenue Growth Estimate

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Global Scale & Innovation: BNY's global market infrastructure position remains a structural advantage. As of June 30, 2026, assets under custody/administration (AUC/A) were $62.6 trillion, up 12% year over year, while international revenues represented 36% of total revenues in the first half of the year.

The company is also expanding in higher-growth areas, including ETFs and alternatives. Recent initiatives include Buy-Side Trading Solutions, CollateralOne, Borrow+, digital asset custody, real-time payments and expanded same-day FX settlement.

Earlier this month, the company announced that it entered a strategic collaboration with Galaxy to advance its digital asset infrastructure for institutional markets, including support for staking, a process that allows eligible digital assets to earn rewards, on BNY’s Digital Asset Custody platform. Likewise, in June 2026, BNY announced that it is deepening its collaboration with Circle Internet Group. These initiatives are expected to help offset pricing pressure and support fee growth over time. BNY’s total fee revenues saw a CAGR of 2.8% over the last six years ended 2025, with the uptrend continuing in the first half of 2026.

Solid Balance Sheet: BNY maintains a strong liquidity and capital profile. As of June 30, 2026, the company had total debt (comprising federal funds purchased and securities sold under repurchase agreements, commercial paper, other borrowed funds and long-term debt) of $61.7 billion, significantly lower than its cash and due from banks, and interest-bearing deposits of $146.9 billion.

BNY maintains a stable outlook and investment-grade long-term senior debt ratings of Aa3, A and AA- from Moody’s, S&P Ratings and Fitch Ratings, respectively. This renders the company with favorable access to the debt market.

Efficient Capital Distributions: BNY's capital distribution profile remains an important source of shareholder support. After clearing the 2026 stress test, the company increased its quarterly cash dividend 19% to 63 cents per share. Over the past five years, the company has increased dividends six times, with an annualized growth rate of 11.46%.

In April 2026, BNY announced a share repurchase authorization worth $10 billion. As of June 30, 2026, $8.9 billion worth of authorization remained available. Management continues to believe that capital return is dynamic and opportunity-driven, with client growth a priority. This approach will allow distributions to remain meaningful while preserving balance sheet flexibility.

Analyst Sentiments for BNY

Over the past 30 days, the Zacks Consensus Estimate for BNY’s 2026 earnings of $9.26 per share has been revised 1.1% upward. Its 2027 earnings estimate of $10.24 has been revised 1.3% upward. The estimated figures indicate year-over-year growth rates of 23.5% and 10.6% for 2026 and 2027, respectively.

Earnings Estimate Revision Trend

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Should You Invest in BNY Stock Now?

The company remains well-poised for growth as its diversified platforms aid durable fee momentum, while global expansion and a sizable asset base reinforce its long-term growth profile. BNY’s business transformation initiatives, combined with the launch of several other services, will help the One BNY business model. A favorable rate regime and stabilizing funding costs will aid NII growth in the near term.

In terms of its valuation, the BNY stock is currently trading at a trailing 12-month price-to-sales (P/S) ratio of 2.68X, slightly below the industry average of 2.91. This shows that BNY is currently undervalued than its peers.

P/S TTM

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Given the strength in its fundamentals, along with the positive earnings estimate revisions, it seems to be a wise idea to add the BNY stock to your portfolio now. A favorable valuation adds a layer of optimism.

Currently, BNY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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