Truist raises Northern Trust stock target to $116, maintains Hold

On Wednesday, Truist Securities increased the price target for Northern Trust (NASDAQ:NTRS) shares to $116 from the previous $92, while keeping a Hold rating on the stock. The adjustment follows an evaluation of the company’s performance and market position. Trading at a P/E ratio of 10.06 and showing a strong YTD return of 7.13%, InvestingPro analysis suggests the stock is currently undervalued, with additional upside potential.

Northern Trust, known for its Wealth Management franchise, benefits from a market where equities are performing well, as the firm is more heavily invested in equities compared to its peer, Bank of New York Mellon (NYSE:BK) (BNY). With a market capitalization of $21.13 billion and impressive revenue growth of 28.5% in the last twelve months, the company maintains a strong market position. This aspect has historically contributed to Northern Trust’s premium pricing over BNY. However, the premium has recently compressed to less than one turn, a notable decrease from the usual three turns.

Despite the positive trend in equity markets, Truist Securities notes that Northern Trust does not hold the same growth advantage over BNY as it has in the past. This change partly explains why the company’s price-to-earnings (P/E) premium has converged closer to that of BNY.

The first quarter of the year showed encouraging signs for Northern Trust, with year-over-year adjusted expense growth falling below the 5% target for the full year of 2025. Additionally, the company has raised its net interest income (NII) guidance. These developments suggest a positive direction, yet Truist Securities believes investors are still looking for more consistent evidence of expense growth control. InvestingPro data reveals the company maintains an impressive "GREAT" overall financial health score of 3.09, suggesting strong fundamental performance.

Truist Securities’ analysis indicates a cautious approach, suggesting that while Northern Trust’s management team has made progress, it may be prudent to observe further developments before changing the stock’s rating. Notable strengths include the company’s 55-year track record of consistent dividend payments, demonstrating long-term financial stability. The firm’s analysts are waiting to see the impact of the management team’s strategies before considering any rating adjustments. For deeper insights into Northern Trust’s valuation and financial health metrics, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Northern Trust Corporation reported its financial results for the first quarter of 2025, surpassing earnings per share (EPS) forecasts with an EPS of $1.90 compared to the anticipated $1.84. The company also met revenue expectations, reporting $1.95 billion. Northern Trust’s net income for the quarter reached $392 million, supported by a 7% year-over-year increase in net interest income and a 6% rise in trust investment and servicing fees. Meanwhile, Northern Trust Asset Management announced the appointment of Gary Paulin as chief investment strategist for International and Joseph Tanious as chief investment strategist for North America. These appointments aim to enhance the firm’s investment expertise and global market presence. Additionally, Northern Trust Corporation appointed Jeff Alexander as President and CEO of The Northern Trust Company, Canada, as part of its ongoing commitment to Canadian operations. The company has also raised its full-year net interest income guidance, reflecting its strategic initiatives and operational efficiency.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.