Northern (NTRS) AI Stock Analysis

• Market Cap: $20.99B
• Dividend Yield: 2.78%
• Average Volume (3M): 1.55M
• Price to Earnings (P/E): 10.1
• Beta (1Y): 1.14
• Revenue Growth: 21.00%
• EPS Growth: 137.62%
• Country: US
• Employees: 23,400
• Sector: Financial
• Sector Strength: 87
• Industry: Asset Management
• EPS (TTM): 1.90
• Shares Outstanding: 194,538,570
• 10 Day Avg. Volume: 1,422,943
• 30 Day Avg. Volume: 1,548,248
• PEG Ratio: 0.92
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.71
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.58
• Enterprise Value/Gross Profit: 2.86
• Enterprise Value/Ebitda: 9.95
• 1Y Price Target: $105.65
• Price Target Upside: -2.17% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

Northern Trust's overall score reflects its strong financial performance, particularly in profitability and cash flow, and a solid valuation with a low P/E ratio and attractive dividend yield. The earnings call and recent corporate events support a favorable outlook, despite technical analysis suggesting some caution due to negative momentum indicators. The company's strategic growth initiatives and robust financial health balance out concerns about high liabilities and revenue decline.

Positive Factors

Earnings

Northern Trust reported higher net interest income, which exceeded expectations and contributed to strong earnings per share.

Strategic Growth

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

Valuation

Analyst reiterates a 'Buy' recommendation, citing attractive valuation and confidence in an improving return on equity outlook.

Negative Factors

Earnings Projections

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.

Market Positioning

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 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 demonstrates a robust financial profile with strong profitability and cash flow metrics, despite some challenges in revenue growth. The company's adept cost management and efficient cash flow generation provide a solid foundation for continued stability. However, attention should be paid to the high liabilities and the recent revenue decline to ensure sustained 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
11.49B	8.29B	6.77B	6.75B	6.55B	5.98B
	Gross Profit
10.00B	8.29B	6.77B	6.75B	6.55B	5.98B
	EBIT
1.89B	2.66B	1.46B	2.26B	2.01B	1.63B
	EBITDA
2.28B	0.00	2.10B	2.32B	2.53B	2.13B
	Net Income Common Stockholders
2.21B	2.03B	1.11B	1.34B	1.55B	1.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.04B	4.68B	14.89B	4.69B	3.06B	4.39B
	Total Assets
156.11B	155.51B	150.78B	155.04B	183.89B	170.00B
	Total Debt
16.45B	13.37B	13.41B	12.38B	7.24B	8.60B
	Net Debt
-30.50B	-32.03B	-23.82B	7.70B	4.18B	4.21B
	Total Liabilities
144.01B	142.72B	138.89B	143.78B	7.24B	8.60B
	Stockholders Equity
12.10B	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: 107.99
• 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 107.99 is above the 20-day moving average (MA) of 98.63, above the 50-day MA of 96.19, and above the 200-day MA of 98.16, indicating a bullish trend. The MACD of 3.71 indicates Negative momentum. The RSI at 73.41 is Negative, neither overbought nor oversold. The STOCH value of 95.09 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	82 Outperform	$10.63B	18.58	26.62%	1.11%	10.23%	26.56%
TROW	82 Outperform	$21.60B	11.13	19.47%	5.09%	6.51%	4.52%
BK	77 Outperform	$64.44B	14.68	11.29%	2.09%	10.30%	49.77%
NTRS	73 Outperform	$20.99B	10.07	17.54%	2.78%	21.00%	137.62%
BEN	67 Neutral	$11.76B	32.41	2.84%	5.63%	7.02%	-60.38%
STT	65 Neutral	$28.03B	11.04	11.21%	3.02%	15.02%	66.71%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%

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.

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.

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.

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.