On Thursday, RBC Capital Markets adjusted its outlook on Northern Trust Corporation (NASDAQ:NTRS)'s stock, raising the price target to $90 from $86, while maintaining an Outperform rating. This change reflects the firm's confidence in Northern Trust's ability to continue delivering top-tier results despite facing persistent expense challenges.
The trust company, which is listed on NASDAQ under the ticker NASDAQ:NTRS, has been recognized for its consistency in producing strong results throughout various economic cycles. Northern Trust recently reported solid earnings for the second quarter of 2024, affirming its reputation for resilience and robust performance.
However, the company's financials reveal ongoing issues with expenses that are impacting its overall performance. RBC Capital anticipates that Northern Trust's management will intensively focus on curbing expense growth. The efforts to address these cost concerns are expected to be substantial and may require a considerable amount of time to take effect.
Market conditions, particularly fluctuations in short-term interest rates, are projected to remain a significant influence on Northern Trust's profitability. The trust company's ability to successfully manage these external economic factors will be crucial to its continued success.
RBC Capital's analysis suggests that Northern Trust's strong historical performance and capable management team position it well to navigate the current financial landscape. With its established reputation and strategic approach, Northern Trust is poised to tackle the challenges ahead and maintain its industry-leading position.
In other recent news, Northern Trust's earnings and revenue performance have been exceptional. The company reported a second-quarter EPS of $4.34, surpassing the consensus estimate of $1.77. Revenues reached $2.72 billion, exceeding the anticipated $1.83 billion, driven by the sale of Visa (NYSE:V) stock and increased client activity. Upgraded EPS estimates now stand at $8.90 for 2024, a significant rise from the previous $3.35 estimate, and $7.05 for 2025, up from $0.65.
CFRA upgraded Northern Trust to Hold and raised the target to $95, citing an improved outlook for customer markets. Barclays and BofA Securities have also provided positive insights into Northern Trust's future prospects. However, Evercore ISI adjusted its price target down to $86.00, maintaining an In Line rating.
In other developments, Northern Trust successfully passed the Federal Reserve's annual stress test, indicating sufficient capital to withstand a severe economic downturn. The company also contributed to a report emphasizing the need for global standards for blockchain asset trading, projecting that by 2030, digital assets could represent 5% to 10% of the $13 trillion in assets they hold under custody.
These are some of the recent developments shaping Northern Trust's trajectory.
InvestingPro Insights
Following RBC Capital Markets' updated outlook on Northern Trust Corporation (NASDAQ:NTRS), a closer look at real-time metrics and InvestingPro Tips adds further context to the company's financial health and potential. With a Market Cap of 17.37B USD and a P/E Ratio that stands at 12.49, Northern Trust appears to be valued attractively in the market. The company has also demonstrated a solid track record of returning value to shareholders, maintaining dividend payments for an impressive 54 consecutive years, which is indicative of its financial stability and commitment to shareholders.
Despite a slight decline in revenue growth over the last twelve months, with a -1.29% change, the company remains profitable, as analysts predict continued profitability for this year. This aligns with RBC Capital's positive stance on the company's ability to deliver strong results. Moreover, Northern Trust's Price to Book ratio is 1.55, suggesting that the stock might be reasonably priced relative to its book value. Investors interested in deeper analysis and additional insights can find more InvestingPro Tips, including the company's performance outlook and investment risks, by visiting https://www.investing.com/pro/NTRS. To enhance your investing strategy with InvestingPro, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
With three more InvestingPro Tips available, investors can gain a comprehensive understanding of Northern Trust's position in the financial sector. The company's resilience and strategic management are key factors that may help it navigate through the current economic conditions and maintain its industry-leading stance.
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