Shares of Northern Trust (NASDAQ:NTRS) declined about 9% on Thursday after the company reported dismal fourth-quarter results. The quarterly performance was impacted by lower client assets (down 22% year-over-year) and a one-time charge of $266 million related to the “repositioning” of the company’s securities portfolio.
The bank reported earnings per share of $0.71, which compared unfavorably with $1.91 in the prior-year quarter. Also, the reported figure was much below Wall Street’s earnings estimate of $1.81.
Further, revenue declined about 8% to $1.53 billion and lagged analysts’ expectations of $1.75 billion. The fall can be attributed to a 6% decline in Trust, Investment, and Other Servicing fees. This was partially offset by a 48% rise in net interest income (NII).
In Q4 2022, Northern Trust increased provisions by $5 million to $200.9 million. The upside was due to expectations of a weak macroeconomic environment in the near term.
Is Northern Trust a Good Stock?
Overall, Wall Street is sidelined on NTRS stock, with a Hold consensus rating based on three Buys, five Holds, and one Sell. The average price target of $98.11 implies 8.5% upside potential. Shares have plunged 22.4% over the past year.