3 Finance Stocks to Buy Ahead of Q2 Earnings: BLK, BK, STT

The financial sector takes center stage on July 15 with major banks reporting Q2 results. Among them, State Street (STT), Bank of New York Mellon (BK), and BlackRock (BLK) are highlighted as Zacks Rank #2 (Buy) stocks. STT and BK anticipate robust double-digit Q2 earnings growth and strong long-term EPS projections, while BlackRock is poised for a 12% Q2 sales increase to $5.38 billion and 5% EPS growth to $10.86, alongside significant multi-year growth forecasts. These firms are positioned for further upside, benefiting from positive earnings estimate revisions ahead of their reports.

Analysis

The financial sector is poised for a significant reporting event on July 15, with a particular focus on non-money center banks and asset managers that exhibit strong fundamental outlooks. Specifically, State Street (STT) and The Bank of New York Mellon (BK) are positioned favorably within the top 5% of Zacks-ranked industries, with expectations for robust Q2 earnings growth of 10% and 15%, respectively. This near-term optimism is supported by projections for double-digit EPS growth in both fiscal 2025 and 2026. Concurrently, BlackRock (BLK), the world's largest asset manager, is expected to demonstrate continued expansion with a forecasted 12% year-over-year increase in Q2 sales to $5.38 billion and a 5% rise in EPS to $10.86. The company's long-term trajectory appears equally strong, with projections of 11% sales growth in FY25 and 15% in FY26. All three companies—STT, BK, and BLK—are trading near 52-week highs and have benefited from positive earnings estimate revisions, reinforcing the bullish sentiment underscored by their Zacks Rank #2 (Buy) ratings. Furthermore, BlackRock's 46% dividend payout ratio suggests substantial capacity for future capital return increases, complementing its growth profile.

Key Decisions for Investors

• Investors with a bullish outlook on the financial sector should consider State Street, Bank of New York Mellon, and BlackRock ahead of their July 15 earnings, given their strong growth forecasts and positive analyst ratings.
• For income-focused portfolios, BlackRock's 1.89% dividend yield is notable, particularly as its low 46% payout ratio suggests a high probability of future dividend growth, combining income with capital appreciation potential.
• It is critical to monitor the upcoming Q2 reports to validate these positive expectations; specifically, confirm whether STT and BK meet their double-digit earnings growth targets and if BLK's AUM and sales figures align with the projected 12% increase.