Rafferty Capital Bullish On State Street Corporation

Analysts at Rafferty Capital Markets upgraded shares of State Street Corporation (NYSE: STT) to a Buy rating and an $82 price target Monday.

Richard Bove highlighted causes for the upgrade.

Analysts find: “An incredible 78.5% of the firm’s owned assets are either in cash or relatively low yielding securities. Low interest rates devastate the returns on these funds.”

As interest rates begin to rise, State Street's shares become more admirable. Analysts expect interest rates to begin to rise in the second quarter of 2015.

Bove also noted, "In a higher interest rate environment, the company’s history indicates that the NIM (net interest margin) could easily be 100 basis points higher. This is $2 billion in pretax earnings or an estimated 100% increase in earnings.”

Shares of State Street Corp closed Mondays session at $70.34 up 0.3 percent.