Bank of NY Mellon, Dollar Tree, VF Corp: Trending Stocks
The Bank of New York Mellon (BK) shares close Tuesday's session higher after beating third-quarter earnings estimates, reporting deposits falling by 5% since last quarter. Dollar Tree (DLTR) stock rises on an upgrade from Goldman Sachs forecasting a strong upside on the discount retailer's growth strategy. Lastly, activist investment firm Engaged Capital is taking a stake in V.F. Corporation (VFC), whose brand portfolio includes Vans and North Face.
Yahoo Finance Live anchors Julie Hyman and Josh Lipton take a closer look at several stocks after Tuesday's closing bell.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
JULIE HYMAN: Let's get to some other movers we are watching and we want to start with one that also had to do with earnings. That is Bank of New York Mellon out with a beat on the top and bottom line. While deposits slid for the quarter, executives on the earnings call said that deposits are likely to moderate going forward. In other words, they're not going to be falling by the same pace.
This is a similar situation to what we saw with Charles Schwab yesterday where deposits are still falling, but the rate of decline is slowing. And that maybe there's some sort of trough that investors are looking for when it comes to deposits here. The company also says its assets under custody or administration were $45.7 trillion at the end of September. That was actually down a little bit from the end of June. So it's not just, sort of, consumer deposits it's also its assets under management or under custody.
JOSH LIPTON: But you can see that well in the green. I think you nailed it. I mean, the key here does seem to be the bank is saying total deposits, yes, they dropped 5% in the quarter. But then execs on the call seemed to indicate that, yes, this is likely to stabilize going forward. I think that's what investors really clued in on. Also, they did reaffirm their growth targets in 2023.
JULIE HYMAN: Yeah.
JOSH LIPTON: Moving on, Goldman Sachs points to a potential 20% upside for Dollar Tree. Analysts upgrading the discount store to buy from neutral and boosted the price target as well. The firm noting it sees strong earnings growth potential driven by gains in market share and sticky inflation reels in low and middle-income consumers.
So Goldman now fans-- actually not just of Dollar Tree, which you say, but actually their fans have Dollar Tree and Ollie's Bargain Outlet. They go to buy on both those names, Julie, . It seems like what they like here is a couple of things they like the value offerings. They like the easier comps and they like what they see as attractive valuations.
By the way, they also downgraded BJ's Wholesale to neutral saying other names look more compelling in their universe. You can see some of the pops there.
JULIE HYMAN: You know, it's really interesting to me here because, on the one hand, there's been this thesis that these various discount retailers would benefit during a time of economic weakness and yet they're all down year to date, including Dollar Tree, which you can see is off by 18% So so much for that kind of phenomenon helping things here.
And then finally, wrapping it up with VF Corp, those shares jumping in today's session. The move coming after activist investment firm Engaged Capital took a stake in the company. Engaged Capital pushing for cost cuts and changes to the board for VF Corp, which is the owner of brands like Vans and North Face.
But those shares higher by 14%. VF saying in a statement to us, they're aware of Engaged Capital's investment in the company and the comments. And they said, "We value the views of our shareholders and seek to maintain an open dialogue with the investment community." So not--
JOSH LIPTON: Exactly what you should say.
JULIE HYMAN: --you know, not saying go away, but not saying come here either, right, which is, kind of, treading the line.
JOSH LIPTON: So basically, it sounds like Engaged Capital is saying, listen, we want to build a stake. We want you to make divestitures and we want you to pay down debt, which Bloomberg says, by their math, now amounts to about $8 billion as of July. So this is the company that control Vans. They control North Face, and Dickies. They did hire this new CEO over the summer as well as you were dealing with softer sales growth.
JULIE HYMAN: Yeah, exactly.
