As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at custody bank stocks, starting with Franklin Resources (NYSE: BEN).

Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.

The 16 custody bank stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.1%.

In light of this news, share prices of the companies have held steady as they are up 2.3% on average since the latest earnings results.

Best Q3: Franklin Resources (NYSE: BEN)

Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.

Franklin Resources reported revenues of $1.82 billion, up 5.7% year on year. This print exceeded analysts’ expectations by 4.8%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and revenue estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $23.40.

Is now the time to buy Franklin Resources? Access our full analysis of the earnings results here, it’s free for active Edge members.

Invesco (NYSE: IVZ)

With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE: IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.

Invesco reported revenues of $1.19 billion, up 7.4% year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ AUM estimates.

The market seems happy with the results as the stock is up 10% since reporting. It currently trades at $25.81.

Is now the time to buy Invesco? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: P10 (NYSE: PX)

Operating as a bridge between institutional investors and hard-to-access private market opportunities, P10 (NYSE: PX) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.

P10 reported revenues of $75.93 million, up 2.3% year on year, falling short of analysts’ expectations by 4.5%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ management fees estimates.

P10 delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.6% since the results and currently trades at $9.78.

Read our full analysis of P10’s results here.

Voya Financial (NYSE: VOYA)

Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE: VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.

Voya Financial reported revenues of $1.94 billion, up 4% year on year. This number topped analysts’ expectations by 13%. It was an exceptional quarter as it also logged a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

Voya Financial pulled off the biggest analyst estimates beat among its peers. The stock is down 5.4% since reporting and currently trades at $69.71.

Read our full, actionable report on Voya Financial here, it’s free for active Edge members.

Federated Hermes (NYSE: FHI)

With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.

Federated Hermes reported revenues of $469.4 million, up 14.9% year on year. This result surpassed analysts’ expectations by 5.5%. Overall, it was a stunning quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 5.7% since reporting and currently trades at $49.98.

Read our full, actionable report on Federated Hermes here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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