Evercore ISI Downgrades Northern Trust PT to $100 from $104

Evercore ISI Downgrades Northern Trust PT to $100 from $104

In a significant move, Evercore ISI has downgraded Northern Trust Corporation (NTRS) from a "Buy" rating to a "Hold" rating, reducing the price target to $100 from $104. The decision comes after a strong first quarter performance by Northern Trust, which reported a 13% increase in earnings per share (EPS) and a return on average common equity of 13% [1]. Despite these positive financials, Evercore ISI cited concerns about the company's ability to sustain growth in the face of a challenging macroeconomic environment and increased expenses.

Northern Trust reported net income of $392 million for the first quarter of 2025, a 13% increase compared to the prior year. The company also saw a 6% increase in trust, investment, and other servicing fees, reaching $1.2 billion. Assets under custody and administration grew to $15.8 trillion, up 3% year-over-year, while assets under management increased to $1.2 trillion, a 7% increase from the prior year [1].

However, the company faced several challenges. Currency movements negatively impacted revenue growth by approximately 20 basis points, and trust, investment, and other servicing fees saw a 1% sequential decline. Additionally, noninterest expense increased by 4.8% year-over-year, reflecting higher compensation and outside services expenses [1].

Evercore ISI's downgrade comes as Northern Trust continues to navigate a challenging macroeconomic backdrop. The company has been proactive in managing expenses and has identified discretionary and non-discretionary spending to build a flexible business model. However, the uncertainty surrounding regulatory changes and market volatility could impact future performance.

References:
[1] https://finance.yahoo.com/news/northern-trust-corp-ntrs-q1-070409130.html
[2] https://www.wealthbriefing.com/html/article.php/q1-2025-net-income-rises-strongly-at-northern-trust%3B-wealth-fees-gain