Decent 3Q; FY26 Guidance Raised, NII Guide Conservative? Buybacks Likely Sharp Step Up In 4Q

State Street reported decent 3Q EPS of $3.69. The firm benefited some from lagged markets impact and continued elevated market volatility, albeit with very tough comps qoq versus record F/X trading revenues. Increased volatility should keep deposits high and benefit net interest income (NII) along with higher rates - guidance for NII may be conservative in our view. However, key to fees will be the markets – if markets decline, it would hurt servicing and asset management fees. Volumes in the markets have been tempered in 3Q despite the pick-up in volatility which would also hurt servicing fees. EPS should also benefit from a likely large step-up in share buybacks. For full year 2026, State Street expects: net interest income up 15-16%; fee revenues up 13-14% assuming global equity markets flat from current level; core expenses up 8-8.5%; total capital return ratio of ~80% with share buybacks of about $700 mil in 4Q;