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Northern (NTRS)
NASDAQ:NTRS
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Northern
(NASDAQ:NTRS)
63Neutral
Positive Factors
Earnings
Northern Trust reported higher net interest income, which exceeded expectations and contributed to strong earnings per share.
Strategic Initiatives
Management's focus on driving efficiencies and the recent leadership reshuffle, including the creation of a Chief Operating Officer role, is expected to enhance the ability to identify efficiency opportunities.
Negative Factors
Earnings Growth
Despite revising EPS estimates higher, expectations are not for Northern Trust to achieve double-digit EPS growth this year.
Fee Growth
Lackluster fee growth in most areas, with nearly every fee category seeing declines, except global family office.
Northern (NTRS) vs. S&P 500 (SPY)
Market Cap
$17.86B
Dividend Yield3.28%
Average Volume (3M)1.57M
Price to Earnings (P/E)8.5
Beta (1Y)1.12
Revenue Growth21.00%
EPS Growth137.62%
CountryUS
Employees23,400
SectorFinancial
Sector Strength84
IndustryAsset Management
Share Statistics
EPS (TTM)10.72
Shares Outstanding194,971,600
10 Day Avg. Volume1,561,128
30 Day Avg. Volume1,565,474
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)N/A
Price to Sales (P/S)2.33
Price to Cash Flow (P/CF)-1.80
P/FCF Ratio0.00
Enterprise Value/Market Cap-0.96
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit-2.07
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$105.95Price Target Upside15.68% Upside
Rating ConsensusHold
Number of Analyst Covering11
Northern Business Overview & Revenue Model
Company DescriptionNorthern Trust Corporation (NTRS) is a leading financial services company headquartered in Chicago, Illinois. Established in 1889, the company operates globally, focusing on providing asset servicing, asset management, and wealth management services to corporations, institutions, affluent families, and individuals. Northern Trust is renowned for its client-centric approach, leveraging cutting-edge technology and expert insights to deliver tailored solutions across various sectors, including financial services, healthcare, and real estate.
How the Company Makes MoneyNorthern Trust Corporation generates revenue primarily through three key business segments: Corporate & Institutional Services (C&IS), Wealth Management, and Asset Management. The C&IS segment provides comprehensive asset servicing solutions, including custody, fund administration, and investment operations outsourcing, primarily to institutional clients such as pension funds and public entities. The Wealth Management segment caters to high-net-worth individuals and families, offering personalized financial planning, trust, and investment management services. Meanwhile, the Asset Management segment generates revenue by managing investment products and solutions, including mutual funds and alternative investments, for institutional and individual investors. Additionally, Northern Trust's earnings are bolstered by strategic partnerships and collaborations with technology firms and financial institutions, enhancing their service offerings and operational efficiency.
Northern Financial Statement Overview
Summary
Northern Trust shows strong revenue growth and improved net profitability, yet faces operational efficiency concerns with unavailable EBIT and EBITDA margins. The balance sheet is moderately leveraged, but a low equity ratio presents potential financial instability. Cash flow challenges indicate liquidity constraints, demanding strategic management to sustain growth.Income Statement
Northern has demonstrated a strong revenue growth trend, with a notable increase from $6.77 billion in 2023 to $8.29 billion in 2024, marking a 22.6% growth rate. The gross profit margin remained stable at 100% as revenue equals gross profit. However, the EBIT and EBITDA margins are currently unavailable for 2024, indicating potential operational challenges. Net profit margin improved significantly to 24.5% from 16.3% in 2023, highlighting enhanced profitability.75
Positive
Balance Sheet
Northern exhibits a moderate balance sheet with a debt-to-equity ratio of 0.32 in 2024, suggesting manageable leverage. The return on equity (ROE) is robust at 15.9%, reflecting efficient use of equity to generate profits. However, the equity ratio is relatively low at 8.2%, indicating a high proportion of total liabilities compared to assets, which may pose potential risks under fluctuating market conditions.65
Positive
Cash Flow
The cash flow analysis reveals a challenging scenario with a decline in free cash flow from $1.95 billion in 2023 to -$486 million in 2024. Despite a negative operating cash flow to net income ratio, free cash flow to net income deteriorated significantly, highlighting liquidity constraints. These issues may impact future capital expenditure and operational flexibility.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.29B | 6.77B | 6.75B | 6.55B | 5.98B | Gross Profit |
| 8.29B | 6.77B | 6.75B | 6.55B | 5.98B | EBIT |
| -10.96B | 1.46B | 2.26B | 2.01B | 1.63B | EBITDA |
| 0.00 | 2.10B | 2.32B | 2.53B | 2.13B | Net Income Common Stockholders |
| 2.03B | 1.11B | 1.34B | 1.55B | 1.21B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.68B | 14.89B | 4.69B | 3.06B | 4.39B | Total Assets |
| 155.51B | 150.78B | 155.04B | 183.89B | 170.00B | Total Debt |
| 13.37B | 13.41B | 12.38B | 7.24B | 8.60B | Net Debt |
| -32.03B | -23.82B | 7.70B | 4.18B | 4.21B | Total Liabilities |
| 142.72B | 138.89B | 143.78B | 7.24B | 8.60B | Stockholders Equity |
| 12.79B | 11.90B | 11.26B | 12.02B | 11.69B |
| Cash Flow | Free Cash Flow | |||
| -1.23B | 1.95B | 1.67B | 840.90M | 1.34B | Operating Cash Flow |
| -486.00M | 2.63B | 2.39B | 1.36B | 1.90B | Investing Cash Flow |
| -2.56B | 4.78B | 25.93B | -18.60B | -29.92B | Financing Cash Flow |
| 3.44B | -7.18B | -26.44B | 16.07B | 27.87B |
Northern Technical Analysis
Neutral
91.59
Price Trends
98.86
Negative
102.47
Negative
96.98
Negative
Market Momentum
-2.37
Negative
47.27
Neutral
66.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRS, the sentiment is Neutral. The current price of 91.59 is above the 20-day moving average (MA) of 90.70, below the 50-day MA of 98.86, and below the 200-day MA of 96.98, indicating a neutral trend. The MACD of -2.37 indicates Negative momentum. The RSI at 47.27 is Neutral, neither overbought nor oversold. The STOCH value of 66.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NTRS.
Northern Risk Analysis
Northern disclosed 45 risk factors in its most recent earnings report. Northern reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Northern Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $9.32B | 16.65 | 26.62% | 1.21% | 10.23% | 26.56% | |
78 Outperform | $55.77B | 12.66 | 11.29% | 2.33% | 10.30% | 49.77% | |
74 Outperform | $19.66B | 9.66 | 20.60% | 5.64% | 9.80% | 17.87% | |
67 Neutral | $9.84B | 28.71 | 2.76% | 6.73% | 9.48% | -65.57% | |
66 Neutral | $25.22B | 9.81 | 11.21% | 3.32% | 16.34% | 66.71% | |
63 Neutral | $17.86B | 8.55 | 17.54% | 3.28% | 21.00% | 137.62% | |
63 Neutral | $12.31B | 9.55 | 7.88% | 79.24% | 12.71% | -4.71% |
* Financial Sector Average
Performance Comparison
NTRS
Northern
91.59
10.68
13.20%
BK
Bank of New York Mellon Corporation
78.65
22.75
40.70%
BEN
Franklin Resources
18.72
-3.27
-14.87%
SEIC
SEI Investments Company
78.59
12.91
19.66%
STT
State Street
87.38
15.88
22.21%
TROW
T Rowe Price
88.44
-18.52
-17.31%
Northern Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 5.54%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong capital management, positive operating leverage, and growth in key segments such as asset management and wealth management. However, there were concerns about sequential declines in certain revenue streams and rising expenses. Despite some challenges, the company remains well-positioned with a solid balance sheet and strategic initiatives aimed at growth.Q1-2025 Updates
Positive Updates
Positive Operating Leverage
Northern Trust reported its third consecutive quarter of positive operating leverage, driven by mid-single-digit growth in both trust fees and net interest income.
EPS and Return on Equity Increase
Earnings per share, excluding notables, increased by 13%, and the company generated a return on common equity of 13%.
Capital Returns to Shareholders
The company returned $435 million to shareholders through dividends and stock repurchases.
Growth in Asset Management
Fundraising in the asset management segment is strong, with an on-track goal to nearly double capital raise versus prior year averages.
Strong Performance in Wealth Management
The wealth management segment reported a 6% increase in assets under management year over year.
Family Office Solutions Launch
The launch of Family Office Solutions was positively received, focusing on ultra-high-net-worth clients with more than $100 million in net worth.
Solid Balance Sheet and Regulatory Ratios
The common equity Tier 1 ratio increased by 50 basis points to 12.9%, maintaining strong capital levels.
Asset Servicing Growth
Assets under custody and administration increased by 3% compared to the prior year, with new business growth at attractive margins.
Negative Updates
Sequential Decline in Trust Fees
Trust investment and other servicing fees saw a 1% sequential decline.
Flat Net Interest Income
Net interest income was essentially flat compared to the prior period.
Higher Expenses
Non-interest expenses increased by 3% sequentially and 4.8% compared to the prior year.
Decline in Earnings Per Share Sequentially
Earnings per share decreased by 16% sequentially.
Company Guidance
In the Northern Trust Corporation's first quarter 2025 earnings call, guidance indicated continued positive operating leverage for the third consecutive quarter, driven by mid-single-digit growth in trust fees and net interest income. Excluding notable items, earnings per share (EPS) rose by 13%, with a 13% return on common equity while returning $435 million to shareholders. The company projected an expense growth of below 5% for the full year, with an updated full-year net interest income (NII) guidance from low single-digit to low to mid-single-digit growth. Assets under custody and administration increased by 3% year-over-year, with asset servicing fees growing by 4% and investment management fees up by 9%. The call highlighted strategic focus on growth initiatives, including alternative investment solutions and family office services, alongside efforts in risk management and productivity enhancements.Northern Corporate Events
Shareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
Northern Trust Reports Strong 2024 Financial Performance
Positive
Apr 22, 2025
On April 22, 2025, Northern Trust Corporation held its Annual Meeting of Stockholders, where CEO Michael G. O’Grady presented the company’s financial performance for 2024. The company reported a significant increase in net income, up 83% from the previous year, and a 92% rise in diluted earnings per share, reflecting strong financial health and strategic growth. The meeting highlighted Northern Trust’s strategic objectives to strengthen resiliency, drive productivity, and optimize growth, positioning the company for continued success in the financial services industry.
Spark’s Take on NTRS Stock
According to Spark, TipRanks’ AI Analyst, NTRS is a Neutral.
Northern Trust’s stock is buoyed by strong financial performance and strategic earnings guidance, despite liquidity constraints and technical weaknesses. The robust revenue growth and low valuation metrics are key strengths, while technical analysis suggests caution due to negative momentum. The company’s strategic execution and solid dividend yield support a moderately favorable outlook.
To see Spark’s full report on NTRS stock, click here.
Business Operations and StrategyFinancial Disclosures
Northern Trust Reports Q1 2025 Financial Results
Positive
Apr 22, 2025
Northern Trust Corporation reported a net income of $392 million for the first quarter of 2025, with earnings per diluted common share at $1.90. This represents a decrease from the previous quarter but an increase from the same period last year. The company achieved its third consecutive quarter of positive operating leverage, driven by growth in trust fees and net interest income. Northern Trust also returned $435 million to shareholders, demonstrating the strength of its business model and strategic positioning.
Spark’s Take on NTRS Stock
According to Spark, TipRanks’ AI Analyst, NTRS is a Neutral.
Northern Trust’s stock score reflects robust earnings growth and a solid valuation, countered by challenges in operational efficiency and technical weakness. The strategic execution and positive earnings guidance support a favorable outlook, but liquidity concerns and technical indicators suggest caution.
To see Spark’s full report on NTRS stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.