On Friday, RBC Capital Markets adjusted their outlook on Northern Trust Corporation (NASDAQ:NTRS), increasing the price target to $115 from the previous $107, while retaining an Outperform rating on the company's stock. Trading at $109.54 and near its 52-week high of $111.87, the stock has gained an impressive 28.66% over the past six months. According to InvestingPro data, five analysts have recently revised their earnings expectations upward. The revision follows Northern Trust's impressive fourth-quarter 2024 performance, which was highlighted by positive operating leverage.
The company, known for its high-quality trust services, has consistently delivered top-tier results, even through economic fluctuations. Trading at a P/E ratio of 13.7 and maintaining dividend payments for 55 consecutive years, Northern Trust reinforced its reputation for financial strength and strategic execution. InvestingPro's comprehensive analysis indicates the stock is currently undervalued, with additional insights available in the Pro Research Report.
Analysts at RBC Capital noted Northern Trust's ambitious medium-term strategic objectives, which include a return on equity (ROE) of 10-15%, with a targeted aim for the higher end of this range. Additionally, the company aims to achieve a pre-tax margin of over 30% and to maintain expenses to trust fees within the range of 105-110%.
The company's future profitability is expected to be influenced significantly by market conditions, especially short-term interest rates. Despite potential market volatility, RBC Capital's analysts believe that Northern Trust's strong management team and solid track record position it well to sustain its performance over time.
In summary, RBC Capital's updated price target reflects confidence in Northern Trust's ability to maintain its best-in-class results and to navigate the challenging financial landscape, thereby continuing to deliver sustainable outcomes for its clients and shareholders.
In other recent news, Northern Trust Corporation has reported strong third quarter results, with a net income of $465 million and earnings per share of $2.22. This performance was largely driven by a rise in Trust fees, especially in Wealth Management which saw a 9% increase, and assets under management reaching a record $444 billion, marking a 20% year-over-year increase.
Several analyst firms have adjusted their outlook on the company. Keefe, Bruyette & Woods raised the price target for Northern Trust to $122, Truist Securities assigned a Hold rating with a price target of $110.00, and RBC Capital Markets increased its price target to $107.00. BofA Securities and Evercore ISI revised their EPS estimates for Northern Trust's fourth quarter 2024 and full-year 2025 to $1.92 and $7.58 respectively.
Despite the strong performance, the company continues to face challenges with persistent expense issues. However, Northern Trust's management is actively working to address this, demonstrating a commitment to operational efficiency and strategic investment for future growth. These recent developments underscore Northern Trust's capacity to navigate a complex market environment while delivering value to shareholders and clients.
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