Why State Street Corp (STT) have been downgraded?

State Street Corp (NYSE:STT) received a stock rating downgrade from Keefe Bruyette on Mar-28-16. In a note to investors, the firm issued an Underperform rating and also issued the target price on the stock of $58.00. The analysts previously had a Market Perform rating on the stock.

Analysts have a consensus target price of $63.25 in the 12-month period. The price objective is 7.66% higher than the recent closing price of $58.75. The 52-week price range is $ 50.73 – 80.44 and the company has a market capitalization of $ 23.37B. Analysts covering the shares maintain a consensus Buy rating, according to Zacks Investment Research. zero analyst has rated the stock with a sell rating, 7 has assigned a hold rating, zero says it’s a buy, and 5 have assigned a strong buy rating to the company.

State Street Corp (STT) on March 23, 2016 announced that a research article by State Street Global Exchange’s Will Kinlaw and David Turkington received an “Outstanding Article Award” from The Journal of Portfolio Management’s 17th annual Bernstein Fabozzi/Jacobs Levy Awards.

The article was co-authored by Mark Kritzman, chief executive officer of Windham Capital Management and founding partner of State Street Associates, a division of State Street Global Exchange. This is the third consecutive year the research team has won this award.

The Divergence of High and Low Frequency Estimation: Implications for Performance Measurement is the second of two papers which look at the dangers of extrapolating risk estimates derived from higher frequency data, such as monthly data, to forecast risk over longer-horizons, such as multiple years.

This paper specifically looks at performance measurement, and how the industry standard methods for computing the Sharpe ratio, the most widely used metric for comparing performance across investment managers and strategies, and the information ratio, used to evaluate performance relative to a benchmark, may fail to capture the true risk of long-term investment performance. The complete article, which was featured in the Spring 2015 issue of the journal, can be found here.

“We’re proud to be honored by The Journal of Portfolio Management again this year,” said Turkington, senior vice president and head of Portfolio and Risk Research at State Street Associates. “Very few investors measure risk over the long-term. These results show that for many popular investment strategies, widely-used performance measurement rules do not reflect actual performance risk over longer periods. An investment manager who appears successful based on risk-adjusted performance metrics estimated from monthly returns may appear less successful within the same measurement period based on the same performance metrics estimated from longer-horizon returns. These findings provide a compelling argument for adopting alternative ways to measure performance outcomes over longer periods of time.”

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