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Northern Trust (NTRS) Valuation Check After Leadership Changes And Strong Shareholder Returns

Simply Wall St · 6d ago

Northern Trust (NTRS) is back in focus after its shares moved higher on the same day the company announced new co presidents for Asset Servicing and a new Wealth Management Chief Investment Officer.

See our latest analysis for Northern Trust.

The leadership reshuffle comes after a solid run, with Northern Trust’s 30 day share price return of 8.19% and 90 day share price return of 10.23%. Its 1 year total shareholder return of 44.12% suggests momentum has been building rather than fading.

If this kind of leadership driven story has your attention, it could be a good moment to widen your watchlist and look at fast growing stocks with high insider ownership.

With Northern Trust now trading around its recent all time high and carrying a low value score of 2 plus a small premium to the average analyst price target, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 4.5% Overvalued

Compared with the narrative fair value of US$137.93, Northern Trust’s last close at US$144.12 sits slightly higher, which raises questions about what assumptions sit underneath that gap.

The company's recent organic growth and margin expansion are largely attributed to near-term operational efficiencies and balance sheet optimization (notably lower expense growth and improved operating leverage). However, investors may be overestimating the persistence of these improvements in light of ongoing industry fee pressure from the growing shift to passive investing and ETFs, which is likely to constrain long-term revenue growth and profit margins.

Read the complete narrative.

Curious what keeps this valuation elevated even with softer long run revenue and margin assumptions? The narrative leans heavily on one earnings path and one future P/E that need to line up almost perfectly. The full breakdown spells out how those moving parts fit together.

Result: Fair Value of $137.93 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are also risks that could continue to challenge this view, including fee pressure on servicing and wealth, and substantial technology spending that may limit margin resilience.

Find out about the key risks to this Northern Trust narrative.

Build Your Own Northern Trust Narrative

If this story does not fully reflect your perspective, or you would prefer to examine the numbers yourself, you can create a custom thesis in just a few minutes by starting with Do it your way.

A great starting point for your Northern Trust research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Northern Trust is on your radar, do not stop there. Broaden your opportunity set by lining up a few more focused screens that match your style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.