Northern Trust’s second quarter results meet expectations

NOTGold Trust (NTRS) announced second quarter results in line with expectations. The company experienced strong momentum in all segments.

The company reported adjusted earnings of $1.72 per share, meeting analyst expectations. Earnings per share jumped 18% from earnings of $1.46 per share in the prior year period. (See North Stock Charts on TipRanks)

Total revenue increased 5% year over year to $1.59 billion. The growth was attributable to new business as well as favorable market conditions which offset the negative impact of low interest rates. Trust, investment and other service fees rose 12% year-over-year to $1.08 billion.

However, net interest income was $343.9 million, down 1% sequentially and 9% year-on-year due to lower net interest margins offsetting higher assets average producers.

Net interest margin was 0.97% in the quarter, down 3 basis points sequentially and 25 basis points from the prior year period, reflecting lower average interest rates.

Non-interest revenue increased 10% to $1.24 billion, while total assets under management grew 22% year over year to $1.5 trillion as of June 30, 2021.

NTRS CEO Michael O’Grady said, “As in the prior quarter, we also benefited from an improved outlook for projected economic conditions resulting in the release of credit loss reserves. We continued to focus on serving our customers, executing our long-term priorities, improving operational efficiencies and investing wisely for profitable future growth.

Following the earnings announcement, Credit Suisse analyst Susan Roth Katzke raised the price target on NTRS from $104 to $108 (3% downside potential) while maintaining a sell rating.

Overall, the stock has a strong buy consensus rating based on 2 buys, 3 holds and 1 sell. The North’s average price target of $119.50 implies upside potential of 7.3% from current levels. Shares of NTRS have jumped 50% over the past year.

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