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Raymond James Downgrades Northern Trust On Outlook Concerns

Priya Nigam

Although Northern Trust Corporation (NASDAQ: NTRS) reported a fourth-quarter EPS and revenue beat, Raymond James downgraded the stock and reduced its estimates for the company to reflect a higher expense base.

The Analyst

Analyst David Long downgraded Northern Trust from Strong Buy to Market Perform and removed a $103 price target. 

The Thesis

Northern Trust reported Q4 EPS of $1.80 Wednesday. Excluding tax benefits and a restructuring charge, the EPS would have been $1.68, which is still higher than the consensus of $1.64, Long said in a Thursday note.

The EPS beat was driven by higher net interest income and a lower loss provision, the analyst said. 

The financial services company also reported revenue that was ahead of expectations, driven by higher net interest income and a larger balance sheet.

Revenue growth could moderate with the lack of interest rate hikes and uncertain market performance, Long said, adding that Northern Trust’s expenses rose during the quarter.

View more earnings on NTRS

“Despite a moderate revenue growth outlook, we expect Northern to maintain investments for growth, which will position it well for long-term profitability."

Raymond James reduced its EPS estimates for 2019 by 4 cents to $6.35 and by 7 cents to $7 for 2020.

Price Action

Northern Trust shares were down 1.21 percent to $88.84 at the time of publication Thursday.

Related Links:

Benzinga's Top Upgrades, Downgrades For January 24, 2019

Barclays Constructive On US Large-Cap Bank Stocks Ahead Of Earnings Reports

Latest Ratings for NTRS

Date Firm Action From To
Jan 2019 Raymond James Downgrades Strong Buy Market Perform
Jan 2019 Bank of America Downgrades Buy Neutral
Jan 2019 Jefferies Downgrades Buy Hold

View More Analyst Ratings for NTRS
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