UBS Remains Neutral Following Northern Trust's (NTRS) 4Q Report
UBS maintained a Neutral rating on Northern Trust (NASDAQ: NTRS), and cut the price target to $64.00 (from $68.00), following the company's 4Q earnings report. NTRS reported EPS of $0.99. However, excluding a $5.5 million tax benefit, and an $18.5 million true-up for a new provision methodology, UBS estimates that a core EPS was roughly in line with estimates.
Analyst Brennan Hawken commented, "NTRS reported 4Q EPS of $0.99 but excluding a $5.5 million tax benefit (roughly 2c EPS tailwind) and an $18.5 million true-up for a new provision methodology (5c EPS tailwind) we estimate core EPS was roughly in line with our estimate. In the quarter, stronger than expected NII ($296 mm vs our estimate of $276 mm) was offset by lower FX trading income ($53 mm vs our estimate of $61 mm) and slightly higher total expenses ($825 mm vs our estimate $814 mm). Nonetheless, the stock meaningfully underperformed the market and peers today, as the challenging market environment is likely to weigh on revenues while NTRS has limited expense flexibility (and upward regulatory expense pressure)."
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Shares of Northern Trust closed at $61.43 yesterday.