Mellon Financial Corp. has added another top stock analyst rating to its trophy case.

First Security Van Kasper on Wednesday upgraded Mellon shares to "strong buy" from "buy" and raised its 12-month price target $14, to $60. The Pittsburgh banking company was already a favorite stock of analysts, with an average rating of 1.6 on a First Call/Thomson's scale from 1 (strong buy) to 5 (sell).

Diana Yates of A.G. Edwards & Sons Inc. increased her target price $4 Thursday, to $52, because of an expected price-earnings multiple of 23 times 2001 earnings of $2.24 per share. Mark T. Fitzgibbon of Sandler O'Neill & Partners lifted his target price $5 Tuesday, to $51.

Mellon shares rose 18.75 cents, or 0.43% to close at $43.8125 Thursday, a weak trading day for banks.

"Management continues to leverage its nonbank operations," said First Security analyst Eric E. Rothmann. Citing the company's ability to create above-average earnings growth, he said his 2001 estimate of $2.29 a share would provide a 40% return to investors, excluding the current 2.1% dividend yield.

Mellon's ongoing shift from traditional banking into financial services is a process of "creative destruction to make more money," Mr. Rothmann said. "Mellon's continued leveraging of its asset management capabilities will be critical to its future success."

In a report, Ms. Yates said Mellon is "well positioned to benefit from the changing demographic trends" by serving baby boomers who are making a switch from consumption to investment.

Through its global financial service lines, the company has $511 billion of assets under management and $2.2 trillion under custody. Mellon announced an annualized 12% growth in trust and investment fee revenue in its second-quarter report. Its earnings of 50 cents per share that quarter were in line with analyst expectations.

However, it is not only Mellon's wealth management business that impresses analysts. Regional consumer banking contributed about 16% of its gross revenue last year, and Mr. Fitzgibbon said the company is utilizing these returns "to support investment in the growth businesses."

Large corporate banking has delivered only a 12% return on equity over three years, but Mr. Rothmann said he expects "a refocusing on leveraging on the banking relationship with higher return business."

Ms. Yates said she considers Mellon a good investment, but left her rating at "accumulate." Mr. Fitzgibbon said Mellon deserves to trade on a premium to other banks, and he gives its stock a "buy" rating.

Elsewhere in the market, Salomon Smith Barney increased its third-quarter earnings estimate for Lehman Brothers 45 cents, to $2.80. "Investment banking revenues appear poised to come in significantly better than our original expectation," analyst Guy Moszkowski wrote.

Lehman's stock rose $3.9375, or 3%, to close at $135.375.

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