Northern Trust Earnings: Mixed Start to 2024

Wide-moat-rated Northern Trust reported a mixed start to 2024. First-quarter revenue of $1.65 billion missed the FactSet consensus estimate of $1.78 billion, but it is unclear to us how much of the consensus estimate captured the firm's securities losses related to repositioning during the period, which totaled $189 million. The company's GAAP EPS of $0.96 was in line with the consensus, while adjusted EPS excluding the repositioning was by our calculations $1.59, well above the FactSet consensus estimate of $1.45. Net interest income bounced back in the first quarter, but management is expecting a 3%-5% sequential decline, which likely disappointed investors (judging by the share price action on April 16). As we incorporate Northern Trust's latest results, we expect to maintain our $90 per share fair value estimate.