Markets

Stock of the Week: Northern Trust (NTRS)

Northern Trust (NTRS) has a Very Bullish Chaikin Power Gauge stock rating and has been outperforming the market since early February when its Power Gauge rating turned Bullish. After making a new 52-week high on May 18th, NTRS has pulled back and triggered an Oversold Buy signal in Chaikin Analytics.

NTRS is a multi-bank holding company that is a leading provider of a broad range of asset management, master trust, custody and private banking services. The company reported 1st quarter earnings on April 21 that beat Wall Street estimates, and the stock responded by trading up to new highs above $76. Analysts’ consensus estimates for 2015 are $3.84 vs. $3.40 in 2014, an expected increase of 13%. One analyst, Marty Mosby with Vining Sparks in Memphis, raised his 2016 earnings estimate for Northern Trust to $4.65, well above Wall Street consensus estimates of $4.42.

Profitability is improving as pre-tax margins in the March quarter rose to their highest levels in over 5 years. This reflects an on-going cost-cutting initiative that could see pre-tax margins increase to 34% in 2016 vs. 31% in 2015. The bottom line for NTRS will be further enhanced when the Federal Reserve Board raises interest rates, as their “net interest margin” will expand from its low level of 1.13% in the 1st quarter.

The likelihood of analyst rating upgrades for his under-followed bank is high if margin and revenue improvements continue.

Northern Trust has a Very Bullish Chaikin Power Gauge stock rating that is driven by strong Financial Metrics and Expert Opinions. Improving Technicals and the renewed strength of the Major Bank Group add to the Very Bullish Power Gauge rating. Analysts have recently been raising their 2015 earnings estimates and ratings for NTRS.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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