Looking back on custody bank stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Franklin Resources (NYSE: BEN) and its peers.
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 15 custody bank stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 3.9% on average since the latest earnings results.
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. This print fell short of analysts’ expectations by 18.8%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates.
“As investors navigate today’s complex market and geopolitical landscape, we remain committed to being a trusted partner to our clients, offering solutions across public and private markets,” said Jenny Johnson, President and CEO of Franklin Resources,
Franklin Resources delivered the weakest performance against analyst estimates of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $23.95.
Read our full report on Franklin Resources here, it’s free for active Edge members.
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 an impressive beat of analysts’ AUM and 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 10.7% since reporting. It currently trades at $75.09.
Is now the time to buy Voya Financial? Access our full analysis of the earnings results here, it’s free for active Edge members.
StepStone Group (NASDAQ: STEP)
Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ: STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure.
StepStone Group reported revenues of $237.5 million, up 27.4% year on year, falling short of analysts’ expectations by 1.1%. It was a slower quarter as it posted a significant miss of analysts’ AUM and EPS estimates.
Interestingly, the stock is up 17.9% since the results and currently trades at $67.84.
Read our full analysis of StepStone Group’s results here.
WisdomTree (NYSE: WT)
Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE: WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.
WisdomTree reported revenues of $112.6 million, up 5.2% year on year. This number came in 0.5% below analysts' expectations. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ yield estimates but a miss of analysts’ EBITDA estimates.
The stock is up 3.3% since reporting and currently trades at $13.70.
Read our full, actionable report on WisdomTree here, it’s free for active Edge members.
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 lagged analysts' expectations by 0.6%. It was a slower quarter as it also recorded a significant miss of analysts’ EPS estimates.
The stock is down 13.1% since reporting and currently trades at $65.64.
Read our full, actionable report on Cohen & Steers here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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