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Northern (NTRS)
NASDAQ:NTRS
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Northern (NTRS) AI Stock Analysis

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NTRS

Northern

(NASDAQ:NTRS)

Rating:74Outperform
Price Target:
$139.00
â–²(7.95%Upside)
Northern Trust's overall stock score is driven by strong financial performance and positive earnings call insights, indicating robust growth and shareholder returns. Technical analysis supports this with bullish momentum, while valuation metrics provide a balanced view. The company's strategic initiatives and solid financial foundation enhance its investment appeal, though caution is warranted due to high liabilities and revenue growth challenges.
Positive Factors
Financial Performance
Northern Trust reported higher net interest income, which exceeded expectations and contributed to strong earnings per share.
Mergers and Acquisitions
Northern Trust Corporation is a highly respected firm with a strong wealth management business, making it an attractive merger partner.
Valuation and Growth
A 9% raise in the 2026 earnings per share and price target to $136 reflects confidence in future performance.
Negative Factors
Fee Growth
Lackluster fee growth in most areas, with nearly every fee category seeing declines, except global family office.
Growth Challenges
Northern's growth is toward the bottom of trust banks, with less justification for a premium valuation.
Market Sentiment
The recent increase in Northern Trust's stock price has removed much of the economic benefit for a potential deal, limiting investor upside.

Northern (NTRS) vs. SPDR S&P 500 ETF (SPY)

Northern Business Overview & Revenue Model

Company DescriptionNorthern 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 MoneyNorthern 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 Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: 1.76%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated strong revenue and EPS growth, robust capital returns, and expansion in alternatives and asset servicing. However, challenges such as a decline in FX trading income, increased credit loss provisions, and margin pressures in Wealth Management were noted.
Q2-2025 Updates
Positive Updates
Revenue and EPS Growth
Revenue grew by 8%, and earnings per share increased by 20% compared to the previous year, excluding notable items.
Strong Capital Returns
Northern Trust returned over 100% of earnings to shareholders through dividends and record share repurchases.
Alternatives Expansion
Assets under advisement for alternatives increased by 66% year-over-year, with significant mandates like a $1.25 billion private credit mandate.
Asset Servicing Momentum
Assets under administration are approaching $1 trillion, with strong new business growth and high client retention.
Improving Financial Performance
Fourth consecutive quarter of positive organic growth and operating leverage, with a pretax margin improvement of 160 basis points.
Dividend Increase
Board approved a $0.05 or 7% increase to the quarterly dividend.
Negative Updates
FX Trading Income Decline
Other noninterest income was down 4% year-over-year due to weaker reported FX trading income.
Provision for Credit Losses
The provision for credit losses increased to $16.5 million, reflecting an increase in reserves related to nonperforming loans.
Wealth Management Margin Pressure
Wealth Management's pretax margin decreased by 25 basis points year-over-year, excluding notable items.
Company Guidance
During the Northern Trust Corporation's second quarter 2025 earnings call, the company reported an 8% increase in revenue and a 20% rise in earnings per share, excluding notable items from the prior year. They highlighted a return of over 100% of earnings to shareholders through dividends and record share repurchases. The firm's strategic focus, known as the One Northern Trust strategy, has driven four consecutive quarters of positive organic growth and operating leverage. The strategy centers on optimizing growth, driving productivity, and strengthening resilience and risk management. The company also emphasized their efforts in expanding their alternatives platform, with assets under advisement up 66% year-over-year. Additionally, Northern Trust adjusted its return on equity target from 10-15% to 13-15%, reflecting confidence in their ongoing strategic execution and financial progress.

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
70
Positive
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
65
Positive
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
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue15.82B15.88B12.12B7.75B6.49B6.30B
Gross Profit8.58B8.29B6.75B6.75B6.55B5.98B
EBITDA3.63B3.38B2.10B2.32B2.53B2.13B
Net Income2.21B2.03B1.11B1.34B1.55B1.21B
Balance Sheet
Total Assets165.07B155.51B150.78B155.04B183.89B170.00B
Cash, Cash Equivalents and Short-Term Investments69.32B56.54B64.93B74.52B108.29B107.88B
Total Debt16.14B15.99B17.24B14.85B8.43B9.60B
Total Liabilities152.19B142.72B138.89B143.78B171.87B158.32B
Stockholders Equity12.88B12.79B11.90B11.26B12.02B11.69B
Cash Flow
Free Cash Flow2.92B-1.23B1.95B1.67B840.90M1.34B
Operating Cash Flow3.72B-486.00M2.63B2.39B1.36B1.90B
Investing Cash Flow-8.06B-2.56B4.78B25.93B-18.60B-29.92B
Financing Cash Flow3.33B3.44B-7.18B-26.44B16.07B27.87B

Northern Technical Analysis

Technical Analysis Sentiment
Positive
Last Price128.76
Price Trends
50DMA
115.95
Positive
100DMA
105.59
Positive
200DMA
104.53
Positive
Market Momentum
MACD
3.11
Positive
RSI
61.73
Neutral
STOCH
73.36
Neutral
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 128.76 is above the 20-day moving average (MA) of 126.75, above the 50-day MA of 115.95, and above the 200-day MA of 104.53, indicating a bullish trend. The MACD of 3.11 indicates Positive momentum. The RSI at 61.73 is Neutral, neither overbought nor oversold. The STOCH value of 73.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTRS.

Northern Risk Analysis

Northern disclosed 1 risk factors in its most recent earnings report. Northern reported the most risks in the "Legal & Regulatory" 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$23.65B12.1819.47%4.67%6.51%4.52%
80
Outperform
$11.18B16.9130.06%1.09%10.60%40.74%
78
Outperform
$70.50B15.2211.75%1.94%7.41%51.70%
74
Outperform
$25.05B14.6113.47%2.33%3.44%16.76%
68
Neutral
$31.65B12.4010.94%2.74%13.08%67.88%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
64
Neutral
$12.99B35.842.84%5.14%7.02%-60.38%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NTRS
Northern
128.76
41.99
48.39%
BK
BNY
99.97
35.77
55.72%
BEN
Franklin Resources
24.72
3.01
13.86%
SEIC
SEI Investments Company
89.79
23.68
35.82%
STT
State Street
110.98
28.38
34.36%
TROW
T Rowe Price
107.56
0.90
0.84%

Northern Corporate Events

DividendsFinancial Disclosures
Northern Trust Reports Strong Q2 Earnings and Dividend Increase
Positive
Jul 23, 2025

On July 23, 2025, Northern Trust Corporation reported a second-quarter net income of $421.3 million, with earnings per diluted common share of $2.13, reflecting an increase from the first quarter of 2025 but a decrease compared to the same period in 2024. The corporation experienced growth in trust fees, record net interest income, and an improved pretax margin, contributing to a 20% rise in earnings per share, excluding notable items from the previous period. The company also announced a 7% increase in its quarterly dividend, indicating strong financial momentum and a commitment to delivering value to clients and shareholders.

The most recent analyst rating on (NTRS) stock is a Hold with a $110.00 price target. To see the full list of analyst forecasts on Northern stock, see the NTRS Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 24, 2025