Today we’re going to take a look at the well-established Northern Trust Corporation (NASDAQ:NTRS). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Northern Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists.
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What’s the opportunity in Northern Trust?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.87% above my intrinsic value, which means if you buy Northern Trust today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $79.78, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Northern Trust’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Northern Trust?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Northern Trust, it is expected to deliver a relatively unexciting earnings growth of 8.7%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? NTRS’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on NTRS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Northern Trust. You can find everything you need to know about Northern Trust in the latest infographic research report. If you are no longer interested in Northern Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.