Northern (NTRS) AI Stock Analysis

• Market Cap: $25.69B
• Dividend Yield: 2.27%
• Average Volume (3M): 2.44M
• Price to Earnings (P/E): 12.3
• Beta (1Y): 1.16
• Revenue Growth: 21.00%
• EPS Growth: 137.62%
• Country: US
• Employees: 23,400
• Sector: Financial
• Sector Strength: 81
• Industry: Asset Management
• EPS (TTM): 1.90
• Shares Outstanding: 194,538,570
• 10 Day Avg. Volume: 4,157,780
• 30 Day Avg. Volume: 2,438,295
• PEG Ratio: 1.02
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.46
• Enterprise Value/Market Cap: -0.81
• Enterprise Value/Revenue: -0.34
• Enterprise Value/Gross Profit: -2.44
• Enterprise Value/Ebitda: -1.65
• 1Y Price Target: $113.14
• Price Target Upside: -14.33% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 71 Outperform
• Price Target: $146.00 ▲(10.56%Upside)

Northern Trust's overall stock score is driven by its robust financial performance and strategic growth initiatives, as highlighted in the earnings call and corporate events. While technical indicators suggest caution due to overbought conditions, the company's valuation and dividend yield provide a solid investment case.

Positive Factors

Capital Flexibility

The company has shown capital flexibility with a significant pre-tax unrealized gain and plans for substantial share repurchases.

Potential Merger

A potential merger with BNY could provide a significant premium to Northern Trust Corporation's value.

Wealth Management

Northern Trust is seen as well-positioned with a differentiated wealth management franchise, contributing significantly to its bottom line.

Negative Factors

Earnings Growth Expectations

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.

Premium Valuation

Northern's growth is toward the bottom of trust banks, with less justification for a premium valuation.

Northern Business Overview & Revenue Model

Company Description

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals worldwide. It operates in two segments, Asset Servicing and Wealth Management. The Asset Servicing segment offers asset servicing and related services, including custody, fund administration, investment operations outsourcing, investment management, investment risk and analytical services, employee benefit services, securities lending, foreign exchange, treasury management, brokerage services, transition management services, banking, and cash management services. This segment serves corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors. The Wealth Management segment offers trust, investment management, custody, and philanthropic; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking services. This segment serves high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses. The company also provides asset management services, such as active and passive equity; active and passive fixed income; cash management; alternative asset classes comprising private equity and hedge funds of funds; and multi-manager advisory services and products through separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. In addition, it offers overlay and other risk management services. Northern Trust Corporation was founded in 1889 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Northern Trust Corporation makes money primarily through three main business units: Corporate & Institutional Services (C&IS), Wealth Management, and Asset Management. The C&IS division generates revenue by providing services such as custody, fund administration, investment operations outsourcing, and foreign exchange solutions to large institutions. The Wealth Management unit serves affluent individuals and families, offering comprehensive financial planning, estate planning, and investment management services. The Asset Management division earns income by managing investment products and strategies across a wide range of asset classes for institutional and individual investors. Additionally, Northern Trust benefits from interest income on loans and securities in its banking operations, as well as fees from advisory and transactional services. Strategic partnerships with other financial institutions and a focus on technological innovation also play a crucial role in enhancing the company's revenue streams.

Northern Financial Statement Overview

Summary

Northern Trust has a robust financial profile with strong profitability and cash flow metrics. Despite challenges in revenue growth, effective cost management and solid EBIT margins maintain financial health.

Income Statement

The income statement of Northern shows a mixed performance. The TTM data indicates a decline in total revenue compared to the previous year, but there is a significant improvement in net profit margin due to reduced expenses. Despite the decrease in revenue, the company has managed to maintain a strong EBIT margin, indicating effective cost management. The revenue growth rate is negative, which is a concern, but the overall profitability metrics remain solid.

Balance Sheet

Northern's balance sheet reflects a stable financial position with a moderate debt-to-equity ratio, suggesting a balanced approach to leverage. The equity ratio is healthy, indicating a strong equity base relative to total assets. However, the high level of total liabilities compared to stockholders' equity could pose a risk if not managed carefully. Return on Equity (ROE) is strong, driven by robust net income.

Cash Flow

The cash flow statement reveals a solid free cash flow position, with notable growth in free cash flow in the TTM period. This is a positive indicator of financial health and operational efficiency. The operating cash flow to net income ratio is favorable, showing good cash generation relative to profits. The free cash flow to net income ratio underscores the company's ability to generate cash, despite fluctuations in operating and investing cash flows in prior periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.82B	15.88B	12.12B	7.75B	6.49B	6.30B
Gross Profit	8.58B	8.29B	6.75B	6.75B	6.55B	5.98B
EBITDA	3.63B	3.38B	2.10B	2.32B	2.53B	2.13B
Net Income	2.21B	2.03B	1.11B	1.34B	1.55B	1.21B
Balance Sheet
Total Assets	165.07B	155.51B	150.78B	155.04B	183.89B	170.00B
Cash, Cash Equivalents and Short-Term Investments	69.32B	56.54B	64.93B	74.52B	108.29B	107.88B
Total Debt	16.14B	15.99B	17.24B	14.85B	8.43B	9.60B
Total Liabilities	152.19B	142.72B	138.89B	143.78B	171.87B	158.32B
Stockholders Equity	12.88B	12.79B	11.90B	11.26B	12.02B	11.69B
Cash Flow
Free Cash Flow	2.92B	-1.23B	1.95B	1.67B	840.90M	1.34B
Operating Cash Flow	3.72B	-486.00M	2.63B	2.39B	1.36B	1.90B
Investing Cash Flow	-8.06B	-2.56B	4.78B	25.93B	-18.60B	-29.92B
Financing Cash Flow	3.33B	3.44B	-7.18B	-26.44B	16.07B	27.87B

Northern Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 132.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRS, the sentiment is Positive. The current price of 132.06 is above the 20-day moving average (MA) of 115.16, above the 50-day MA of 106.45, and above the 200-day MA of 101.65, indicating a bullish trend. The MACD of 6.39 indicates Negative momentum. The RSI at 80.82 is Negative, neither overbought nor oversold. The STOCH value of 99.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTRS.

Northern Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEIC	81 Outperform	$11.45B	20.02	26.62%	1.06%	10.23%	26.56%
TROW	81 Outperform	$22.02B	11.34	19.47%	5.08%	6.51%	4.52%
BK	78 Outperform	$65.88B	15.01	11.29%	2.04%	10.30%	49.77%
NTRS	71 Outperform	$25.69B	12.33	17.54%	2.27%	21.00%	137.62%
STT	70 Neutral	$31.22B	12.30	11.21%	2.78%	15.02%	66.71%
Sector *	67 Neutral	$16.84B	11.72	9.71%	3.76%	11.61%	-9.60%
BEN	64 Neutral	$13.03B	35.90	2.84%	5.16%	7.02%	-60.38%

Northern Corporate Events

Northern Trust Reports Strong 2024 Financial Performance

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.

Northern Trust Reports Q1 2025 Financial Results

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.