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.
Analyst David Long downgraded Northern Trust from Strong Buy to Market Perform and removed a $103 price target.
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.
“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.
Northern Trust shares were down 1.21 percent to $88.84 at the time of publication Thursday.
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
|Jan 2019||Raymond James||Downgrades||Strong Buy||Market Perform|
|Jan 2019||Bank of America||Downgrades||Buy||Neutral|
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