Northern Trust Corporation Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Northern Trust Corporation (NASDAQ:NTRS), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Northern Trust missed analyst forecasts, with revenues of US$1.7b and statutory earnings per share (EPS) of US$0.96, falling short by 7.2% and 9.8% respectively. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Northern Trust

Following the latest results, Northern Trust's eleven analysts are now forecasting revenues of US$7.25b in 2024. This would be a notable 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 34% to US$6.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.24b and earnings per share (EPS) of US$6.06 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$91.73, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Northern Trust analyst has a price target of US$101 per share, while the most pessimistic values it at US$85.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Northern Trust is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Northern Trust's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Northern Trust to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Northern Trust analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether Northern Trust is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.