State Street targets 35% pretax margin, lifts 2026 outlook (STT)

State Street posted record revenue of $4 billion in the second quarter, the custodian bank said on its earnings call Tuesday. The company raised its 2026 fee revenue growth target to 12%–13% and lifted its net interest income outlook for the year.

Management outlined medium-term financial goals: a 35% pretax margin and a return on tangible common equity in the mid-20% range. The targets reflect the benefit of higher asset servicing fees and new technology revenue from tokenized servicing, executives said.

The board approved a dividend increase, the first hike since 2022. State Street did not disclose the new payout amount on the call.

The stock carries an Alpha Score of 71 out of 100, a moderate rating, on the firm's proprietary model. That places it near the top of the Financials sector.

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