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Northern
(NASDAQ:NTRS)
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Rating:60Neutral
Price Target:
$174.00
â–¼(-7.28% Downside)
Action:Reiterated
Date:10/21/26
The score is driven primarily by mixed financial quality: improving profitability and ROE are offset by sharply weaker and volatile free cash flow and moderate leverage. Earnings-call guidance and sentiment are a clear positive, while technical indicators remain a notable near-term headwind. Valuation is supportive but not the main driver.
Positive Factors
Diversified fee growth and operating leverage
Broad growth across trust fees, net interest income, and capital markets demonstrates the benefit of Northern Trust’s diversified model. Expense growth below revenue growth is also improving operating leverage, supporting stronger profitability and giving management more capacity to invest in client capabilities.
Negative Factors
Highly volatile cash conversion
The sharp decline in free cash flow and its multi-year volatility weaken confidence that reported earnings consistently convert into deployable cash. Less predictable cash generation can constrain internal funding for investment and capital returns, particularly if operating conditions become less favorable.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified fee growth and operating leverage
Broad growth across trust fees, net interest income, and capital markets demonstrates the benefit of Northern Trust’s diversified model. Expense growth below revenue growth is also improving operating leverage, supporting stronger profitability and giving management more capacity to invest in client capabilities.
Read all positive factors
Northern Key Performance Indicators (KPIs)
Any
Assets Under Management
Total market value of client assets the firm manages, which drives fee revenue and reflects client trust and scale. Rising AUM generally increases recurring fees and signals growth; declines or stagnant AUM can cut fee income and indicate outflows or underperformance.
Total market value of client assets the firm manages, which drives fee revenue and reflects client trust and scale. Rising AUM generally increases recurring fees and signals growth; declines or stagnant AUM can cut fee income and indicate outflows or underperformance.
Data provided by:
The Fly
The FlyNorthern (NTRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.27B
Dividend Yield1.97%
Average Volume (3M)1.14M
Price to Earnings (P/E)12.9
Beta (1Y)1.02
Revenue Growth6.57%
EPS Growth48.88%
CountryUS
Employees23,800
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)11.71
Shares Outstanding182,955,660
10 Day Avg. Volume1,306,586
30 Day Avg. Volume1,137,063
Financial Highlights & Ratios
PEG Ratio-1.51
Price to Book (P/B)1.98
Price to Sales (P/S)1.79
P/FCF Ratio4.69
Enterprise Value/Market Cap0.28
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit0.93
Enterprise Value/Ebitda2.23
Forecast
1Y Price Target
$183.33Price Target Upside-2.31% Downside
Rating ConsensusHold
Number of Analyst Covering12
EPS Forecast (FY)11.53
Revenue Forecast (FY)$9.48B
Northern Business Overview & Revenue Model
Company Description
Northern Trust Corporation, a financial holding company established in 1889 and based in Chicago, Illinois, offers a comprehensive suite of wealth management, asset servicing, asset management, and banking solutions worldwide. Its diverse client b...
How the Company Makes Money
Northern Trust makes money primarily by charging fees for financial services and by earning net interest income from banking activities. A major revenue stream is fee-based income from Asset Servicing, where the company provides custody, fund admi...
Northern Earnings Call Summary
Earnings Call Date:Oct 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 21, 2027
Earnings Call Sentiment Positive
The call was strongly positive. Northern Trust reported substantial year-over-year growth in revenue, earnings, EPS, operating leverage, margins, and shareholder returns, while all three businesses generated organic trust-fee growth and the company highlighted progress in AI, digital assets, wealth management, asset servicing, and asset management. The main challenges were sequential declines in deposits and net interest income, lower transaction activity, pricing compression, a reserve build, market-related fee pressure, and a planned CFO transition, but management characterized credit quality and capital as strong and provided positive fourth-quarter revenue and net-interest-income guidance.Positive Updates
Robust Reported Earnings and Returns
Northern Trust reported third-quarter net income of $642.9 million, earnings per share of $3.40, return on average common equity of 20.1%, pre-tax income of $804.2 million, and a pre-tax margin of 34.9%. Management said return on equity, pre-tax margin, and expense-to-trustee ratio were all at or slightly better than medium-term targets.
Negative Updates
Sequential Deposit and Earning-Asset Declines
Average deposits declined 3% sequentially, with interest-bearing deposits down 3% and non-interest-bearing deposits down 5%. Average earning assets declined 2% sequentially as lower deposit balances reduced money-market assets. Management attributed much of the deposit decline to typical third-quarter seasonality.
Read all updates
Q3-2026 Updates
Positive
Negative
Robust Reported Earnings and Returns
Northern Trust reported third-quarter net income of $642.9 million, earnings per share of $3.40, return on average common equity of 20.1%, pre-tax income of $804.2 million, and a pre-tax margin of 34.9%. Management said return on equity, pre-tax margin, and expense-to-trustee ratio were all at or slightly better than medium-term targets.
Read all positive updates
Company Guidance
Assuming a relatively stable market environment and interest rate backdrop, Northern Trust now expects fourth quarter net interest income to increase 8%-9% year-over-year and total revenue to increase 6%-7%; excluding notable items, it expects positive operating leverage in the fourth quarter and 500 basis points or more of operating leverage for the full year. The company expects the effective tax rate to be closer to 25% in the fourth quarter and going forward, anticipates one more Fed hike in December, portfolio yields of roughly 3.5%, reinvestment opportunities of 4%-5%, higher average deposits, and no NIM compression going forward. Dave Fox said the normalized FX rate is probably more in the 70s, while capital ranges of between 11 and 12 remain comfortable and the company is above 12.Northern Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.18B | 14.30B | 15.88B | 12.12B | 7.75B | 6.49B |
| Gross Profit | 9.08B | 8.09B | 8.29B | 6.75B | 6.75B | 6.55B |
| EBITDA | 3.80B | 3.11B | 3.38B | 2.10B | 2.32B | 2.53B |
| Net Income | 2.24B | 1.74B | 2.03B | 1.11B | 1.34B | 1.55B |
Balance Sheet | ||||||
| Total Assets | 179.30B | 177.13B | 155.51B | 150.78B | 155.04B | 183.89B |
| Cash, Cash Equivalents and Short-Term Investments | 51.76B | 63.78B | 56.54B | 64.93B | 74.52B | 108.29B |
| Total Debt | 15.76B | 16.43B | 15.99B | 17.24B | 14.85B | 8.43B |
| Total Liabilities | 165.90B | 164.17B | 142.72B | 138.89B | 143.78B | 171.87B |
| Stockholders Equity | 13.40B | 12.96B | 12.79B | 11.90B | 11.26B | 12.02B |
Cash Flow | ||||||
| Free Cash Flow | 131.10M | 5.46B | -1.23B | 1.95B | 1.67B | 840.90M |
| Operating Cash Flow | 529.30M | 5.53B | -486.00M | 2.63B | 2.39B | 1.36B |
| Investing Cash Flow | -7.62B | -20.17B | -2.56B | 4.78B | 25.93B | -18.60B |
| Financing Cash Flow | 6.48B | 15.18B | 3.44B | -7.18B | -26.44B | 16.07B |
Northern Technical Analysis
Negative
187.66
Price Trends
177.44
Negative
177.72
Negative
163.54
Positive
Market Momentum
-3.35
Negative
38.27
Neutral
56.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTRS, the sentiment is Negative. The current price of 187.66 is above the 20-day moving average (MA) of 168.56, above the 50-day MA of 177.44, and above the 200-day MA of 163.54, indicating a neutral trend. The MACD of -3.35 indicates Negative momentum. The RSI at 38.27 is Neutral, neither overbought nor oversold. The STOCH value of 56.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $12.86B | 18.41 | 28.69% | 0.96% | 11.21% | 6.93% | |
79 Outperform | $21.79B | 10.35 | 20.45% | 5.01% | 6.97% | 11.41% | |
77 Outperform | $43.08B | 11.67 | 61.73% | 1.35% | 8.79% | 28.59% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $29.87B | 13.32 | 18.32% | 1.39% | 7.75% | 12.07% | |
66 Neutral | $45.45B | 13.56 | 13.10% | 2.04% | 3.23% | 29.87% | |
60 Neutral | $30.27B | 12.90 | 18.73% | 1.97% | 6.57% | 48.88% |
* Financial Sector Average
NTRS
Northern
165.82
43.67
35.75%
AMP
Ameriprise Financial
496.83
24.95
5.29%
RJF
Raymond James Financial
159.19
-3.58
-2.20%
SEIC
SEI Investments Company
104.50
23.94
29.72%
STT
State Street
167.84
55.89
49.92%
TROW
T Rowe Price
103.45
6.08
6.25%
Northern Corporate Events
Business Operations and StrategyFinancial Disclosures
Northern Trust posts strong third-quarter 2026 earnings
Positive
Oct 21, 2026
On October 21, 2026, Northern Trust reported third-quarter 2026 net income of $642.9 million and diluted earnings per common share of $3.40, down from the prior quarter but sharply higher than a year earlier. Trust, investment and other servicing ...
Business Operations and StrategyExecutive/Board Changes
Northern Trust Appoints Rima Qureshi to Board
Positive
Oct 20, 2026
On October 20, 2026, Northern Trust announced that its board of directors appointed Rima Qureshi, former executive vice president and chief strategy officer of Verizon Communications Inc., as a director of Northern Trust Corporation and its princi...
Business Operations and StrategyExecutive/Board Changes
Northern Trust Announces Upcoming CFO Retirement and Succession
Neutral
Sep 29, 2026
On September 28, 2026, Northern Trust Corporation announced that Chief Financial Officer David W. Fox, Jr. plans to retire on or around March 31, 2027, after a long career in financial services. He will remain in his role through the end of the fi...
Business Operations and StrategyDividends
Northern Trust Announces Redemption of Series D Preferred Stock
Neutral
Aug 3, 2026
Northern Trust Corporation announced on August 3, 2026 that it will redeem all 5,000 outstanding shares of its Series D Non-Cumulative Perpetual Preferred Stock and the related 500,000 depositary shares on October 1, 2026. The depositary shares, e...
Business Operations and StrategyDividendsFinancial Disclosures
Northern Trust posts strong Q2 results, boosts dividend
Positive
Jul 22, 2026
On July 22, 2026, Northern Trust reported second-quarter 2026 net income of $792.2 million and diluted earnings per share of $4.23, sharply higher than both the first quarter of 2026 and the prior-year period. Total revenue on a fully taxable equi...
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.