Northern Trust Q3 Earnings: Can NasdaqGS:NTRS Hit Its $1.38 EPS Target?

in EARNINGS/INVESTING IDEAS by

Northern Trust Corporation (NasdaqGS:NTRS) is scheduled to report Q3 earnings results on October 21, 2020.

The company is expected to report earnings of $1.38/share on revenue of $1.479 billion. The consensus earnings per share (EPS) of $1.38/share is based on a poll of 13 analysts and represents a decline in eps of −18.1% over the same quarter last year, when the company reported earnings of $1.69/share.

The revenue forecast of $1.479 billion based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −4.3%. Last year the company reported $1.546 billion in revenue for the quarter.

Expected to report EPS contraction of −18.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,479.22 $1,545.50 −4.3%
EPS $1.38 $1.69 −18.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Northern Trust Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.37 $1.46 6.2% Beat
Q1, 2020 $1.45 $1.55 6.8% Beat
Q4, 2019 $1.74 $1.89 8.3% Beat
Q3, 2019 $1.63 $1.69 3.4% Beat
Q2, 2019 $1.68 $1.75 4.4% Beat
Q1, 2019 $1.46 $1.53 4.7% Beat
Q4, 2018 $1.64 $1.66 1.3% Beat
Q3, 2018 $1.61 $1.59 −1.4% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −2.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $79.83 $77.48 −2.9% Decline
April 21, 2020 $79.33 $76.17 −4.0% Decline
January 22, 2020 $108.57 $104.07 −4.1% Decline
October 23, 2019 $97.51 $100.35 2.9% Increase

Fundamentals And Technical Analysis

Northern Trust Corporation is currently trading at $87.24/share, down −0.2% for the day. The company is trading at approximately 79.4% of its 52-week high of $110.48/share. The company’s stock price is up 12.6% since the last earnings report and up 1.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 60.40 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:NTRS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 13.40 and a forward P/E multiple of 14.93.

Northern Trust Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.73. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $87.24
P/E Ratio 13.4x
P/E Ratio (Fwd) 14.9x
PEG Ratio −4.8
Total Debt / Total Capital 42.4%
Levered Free Cash Flow $2.505 billion
Free Cash Flow Yield 13.8%

Finbox

Northern Trust Corporation is a large-cap stock with a market capitalization of $18.183 billion. The company operates in the Financials sector and the Capital Markets industry.

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, Corporate & Institutional Services (C&IS) and Wealth Management. The C&IS 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. The company was founded in 1889 and is headquartered in Chicago, Illinois.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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