Northern Trust Q3 profit tops estimates on better expense management

Overview

• Northern Trust Q3 revenue of $2.03 bln beats analyst expectations

• EPS for Q3 at $2.29, surpassing analyst estimates

• Net income for Q3 was $457.6 mln, slightly down from last year

Outlook

• Northern Trust did not provide specific future guidance in the press release

Result Drivers

• TRUST FEES - Growth in trust fees contributed to revenue increase, driven by asset servicing and wealth management

• EXPENSE DISCIPLINE - Continued focus on expense management led to pre-tax margin expansion and positive operating leverage

• ASSET GROWTH - Assets under management and custody increased due to favorable markets and currency translation

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 11 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the investment management & fund operators peer group is "buy."

• Wall Street's median 12-month price target for Northern Trust Corp is $136.00, about 5.5% above its October 21 closing price of $128.52

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 15 three months ago

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