Deutsche Bank Downgrades Northern Trust (NTRS) to Hold
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Deutsche Bank analyst Brian Bedell downgraded Northern Trust (NASDAQ: NTRS) from Buy to Hold with a price target of $80.00 (from $101.00).
The analyst comments "3Q results aside, we view the forward outlook less favorably upon our estimate revisions (detail below), and while we still expect Northern Trust to possess a premium growth rate over time to trust bank peers BNY Mellon (BK-Hold) and State Street (STT-Hold), we no longer see the future growth outlook as being differentiated enough to warrant a substantial valuation premium to BK & STT (see Figures 1, 2 & 4). This said, we think a 5-10% relative P/E premium is warranted but not the 15-20% premium we assigned before this downgrade. Thus, despite the 9% pullback in the stock today, our new PT of $80 (down from $101 prior upon reduced EPS estimate revisions & lower P/E target), implies the shares seem fairly valued at current levels, driving our downgrade from Buy to Hold."
Shares of Northern Trust closed at $87.61 yesterday.
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