Barclays Maintains an 'Equalweight' on Northern Trust (NTRS); 3Q11 EPS Review: Bucking the Net Interest Margin Contraction Trend
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Price: $191.41 +0.49%
Rating Summary:
7 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
7 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Equalweight' on Northern Trust (NASDAQ: NTRS) price target lowered $5 to $55.00.
Barclays analyst says, "One of the larger takeaways from NTRS's 3Q11 results was that it did not experience the same level of large scale deposit inflows in August, particularly around the debt ceiling issue, that some of its peer institutions recorded. Accordingly, while its average earning asset balances did not grow by that much (+1% linked quarter vs. BK +14% and STT +12%), it also did not face the same level of net interest margin pressure (+2bps vs. BK -11bps and STT -17bps). Despite the various puts and takes here, its net interest income increased 4% linked quarter (BK +6% and STT +2%) which was broadly in line with peers. While it continues to return among the highest level of earnings (60% through dividends and buybacks) to shareholders in our coverage, it again failed to achieve positive operating leverage, something we are hopeful its planned expense initiatives (more details in January) will address."
"We lowered our 2011 EPS estimate to $2.61 from $2.65 and our 2012 EPS estimate to $3.00 from $3.10 to reflect the recent market weakness and the impact of the prolonged low rate environment on net interest margins and money market fee waivers."
For more ratings news on Northern Trust click here and for the rating history of Northern Trust click here.
Shares of Northern Trust closed at $37.93 yesterday.
Barclays analyst says, "One of the larger takeaways from NTRS's 3Q11 results was that it did not experience the same level of large scale deposit inflows in August, particularly around the debt ceiling issue, that some of its peer institutions recorded. Accordingly, while its average earning asset balances did not grow by that much (+1% linked quarter vs. BK +14% and STT +12%), it also did not face the same level of net interest margin pressure (+2bps vs. BK -11bps and STT -17bps). Despite the various puts and takes here, its net interest income increased 4% linked quarter (BK +6% and STT +2%) which was broadly in line with peers. While it continues to return among the highest level of earnings (60% through dividends and buybacks) to shareholders in our coverage, it again failed to achieve positive operating leverage, something we are hopeful its planned expense initiatives (more details in January) will address."
"We lowered our 2011 EPS estimate to $2.61 from $2.65 and our 2012 EPS estimate to $3.00 from $3.10 to reflect the recent market weakness and the impact of the prolonged low rate environment on net interest margins and money market fee waivers."
For more ratings news on Northern Trust click here and for the rating history of Northern Trust click here.
Shares of Northern Trust closed at $37.93 yesterday.
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