Shares of Bank of New York Mellon Corp. jumped 3.6% in morning trading Wednesday, enough to pace its peer group’s gainers, after BofA Securities analyst Michael Carrier swung to bullish from bearish on the financial services company, citing an improving earnings outlook and attractive valuation. “Despite the near-term low short-rate headwinds, we expect the combination of rising rates, strategic initiatives and active expense/capital management to drive stronger revenue and earnings growth over the next few years,” Carrier wrote in a note to clients. He raised his rating to buy from underperform, and boosted his stock price target to $50 from $43. He said Bank of New York (BK) has a bit more of a defense business mix than some peers, “so if rising rates create some market indigestion in the near term, we expect BK to hold up relatively well.” The stock, which was the top gainer among SPDR Financial Select Sector ETF components, has rallied 12.0% over the past three months, while the financial ETF has advanced 16.6% and the S&P 500 has gained 6.2%. Over the same time, the yield on the 10-year Treasury note has increased by about 72 basis points to 1.645%.

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