Northern Trust tops Q2 revenue estimates, raises dividend

Overview

• U.S. financial services firm's Q2 revenue rose 35% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 beat consensus, aided by Visa exchange offer gain

• Company raised quarterly dividend by 10%

Outlook

• Northern Trust did not provide specific financial guidance for the upcoming quarter or full year

Result Drivers

• VISA EXCHANGE OFFER - Q2 results included a $525.4 mln pre-tax gain from participation in the second Visa, Inc. exchange offer

• FEE AND NET INTEREST INCOME GROWTH - Revenue growth was supported by robust fee growth and double-digit net interest income growth, per CEO Michael O’Grady

• PORTFOLIO REPOSITIONING LOSS - Q2 included a $73.9 mln pre-tax loss on sale of available-for-sale debt securities during portfolio repositioning

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 11 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the investment management & fund operators peer group is "buy."

• Wall Street's median 12-month price target for Northern Trust Corp is $179.00, about 3.3% below its July 21 closing price of $185.06

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• July 21 - Charles Schwab posts record quarterly profit on trading boom

• July 21 - Webster Financial Q2 revenue beats estimates on loan, deposit growth

• July 21 - Capital One second-quarter profit rises on higher interest income

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)