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Northern Trust Corporation quietly underpins the financial wellbeing of some of the world’s most influential institutions and high-net-worth families, shaping the asset management and wealth services landscape with precision and trust. Renowned for its comprehensive suite of banking, custody, and investment management solutions, Northern Trust combines deep industry expertise with innovative technology to deliver exceptional quality and reliability. As market dynamics evolve, the key question remains: does Northern Trust’s solid foundation and market position translate into compelling growth and value for investors today?
Table of contents
Business Model & Company Overview
Northern Trust Corporation, founded in 1889 and headquartered in Chicago, Illinois, stands as a leading player in the asset management industry. Its integrated ecosystem spans wealth management, asset servicing, and banking solutions, catering to corporations, institutions, and high-net-worth individuals worldwide. This cohesive approach enables Northern Trust to deliver tailored financial services that interlock seamlessly across its diverse client base.
The company’s revenue engine balances recurring income from its Asset Servicing segment—which includes custody, fund administration, and risk management—with Wealth Management services such as trust and investment management. Northern Trust maintains a strong presence across the Americas, Europe, and Asia, leveraging its global footprint to serve institutional and private clients. Its durable competitive advantage lies in its trusted brand and comprehensive service offering, securing its role in shaping the future of financial services.
Financial Performance & Fundamental Metrics
This section provides a clear analysis of Northern Trust Corporation’s income statement, key financial ratios, and dividend payout policy to guide informed investment decisions.
Income Statement
The table below presents Northern Trust Corporation’s key income statement figures for the fiscal years 2021 to 2025, expressed in USD.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 6.49B | 7.75B | 12.12B | 15.88B | 14.30B |
| Cost of Revenue | -57.7M | 1.00B | 5.37B | 7.58B | 6.21B |
| Operating Expenses | 4.54B | 4.98B | 5.28B | 5.63B | 5.75B |
| Gross Profit | 6.55B | 6.75B | 6.75B | 8.29B | 8.09B |
| EBITDA | 2.53B | 2.32B | 2.10B | 3.38B | 3.21B |
| EBIT | 2.01B | 1.77B | 1.46B | 2.66B | 2.33B |
| Interest Expense | 23.8M | 991M | 5.34B | 7.59B | 6.21B |
| Net Income | 1.55B | 1.34B | 1.11B | 2.03B | 1.74B |
| EPS | 7.16 | 6.16 | 5.09 | 9.80 | 8.79 |
| Filing Date | 2022-02-28 | 2023-02-28 | 2024-02-27 | 2025-02-24 | 2026-01-22 |
Income Statement Evolution
Northern Trust Corporation’s revenue grew by 120.4% over 2021-2025 but declined by 9.93% between 2024 and 2025. Net income increased modestly by 12.4% over the full period despite a one-year drop of 5.06%. Gross margin remained stable and favorable at 56.54%, while net margin shrank by 49% overall but still stood at a favorable 12.15% in 2025.
Is the Income Statement Favorable?
The 2025 income statement shows a 9.93% revenue decline and a 12.33% drop in EBIT, reflecting some operational challenges. Margins remain generally favorable, with a 16.3% EBIT margin and a 12.15% net margin, but interest expense at 43.45% of revenue is an unfavorable pressure point. Overall, the fundamentals for 2025 appear mixed, with more indicators leaning unfavorable than favorable.
Financial Ratios
The following table summarizes key financial ratios for Northern Trust Corporation (NTRS) from 2021 to 2025, highlighting profitability, valuation, liquidity, leverage, and efficiency metrics:
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 23% | 17% | 9.1% | 13% | 12% |
| ROE | 12.9% | 11.9% | 9.3% | 15.9% | 13.4% |
| ROIC | 6.1% | 4.3% | 3.2% | 6.2% | 6.8% |
| P/E | 16.1 | 13.8 | 15.8 | 10.2 | 14.7 |
| P/B | 2.07 | 1.64 | 1.47 | 1.61 | 1.98 |
| Current Ratio | 1.39 | 0.60 | 0.54 | 0.45 | 0.41 |
| Quick Ratio | 1.39 | 0.60 | 0.54 | 0.45 | 0.41 |
| D/E | 0.70 | 1.32 | 1.45 | 1.25 | 1.27 |
| Debt-to-Assets | 4.6% | 9.6% | 11.4% | 10.3% | 9.3% |
| Interest Coverage | 84.5 | 1.78 | 0.27 | 0.35 | 0.38 |
| Asset Turnover | 0.035 | 0.050 | 0.080 | 0.102 | 0.081 |
| Fixed Asset Turnover | 6.36 | 15.5 | 24.1 | 16.4 | 30.8 |
| Dividend Yield | 2.5% | 4.3% | 3.8% | 3.1% | 2.3% |
Evolution of Financial Ratios
Northern Trust Corporation’s Return on Equity (ROE) showed moderate fluctuations, peaking around 15.9% in 2024 before settling near 13.4% in 2025, indicating some decrease in profitability. The Current Ratio steadily declined from 1.39 in 2021 to 0.41 in 2025, signaling deteriorating short-term liquidity. Meanwhile, the Debt-to-Equity Ratio increased from 0.70 in 2021 to 1.27 in 2025, reflecting a rise in financial leverage over the period.
Are the Financial Ratios Favorable?
In 2025, profitability ratios such as net margin (12.15%) were favorable, but ROE (13.4%) and return on invested capital (6.78%) were neutral. Liquidity ratios, including current and quick ratios at 0.41, were unfavorable, highlighting potential short-term solvency risks. Leverage indicators showed mixed signals: a favorable low debt-to-assets ratio of 9.27% contrasts with an unfavorable debt-to-equity ratio of 1.27 and weak interest coverage of 0.38. Efficiency ratios were mostly unfavorable, except for a strong fixed asset turnover of 30.78. Overall, the global assessment of ratios is slightly unfavorable.
Shareholder Return Policy
Northern Trust Corporation maintains a consistent dividend payout ratio around 30-60%, with a dividend per share near $3.1-$3.8 and an annual yield fluctuating between 2.3% and 4.3%. The policy appears supported by net income and free cash flow, though coverage ratios vary, suggesting some caution on sustainability.
The company also engages in share buybacks, complementing its dividend distributions. This balanced approach between dividends and buybacks indicates a strategy aimed at stable shareholder returns, yet the variability in payout and coverage metrics warrants monitoring to ensure long-term value creation remains sustainable.
Score analysis
The following radar chart presents a comprehensive view of Northern Trust Corporation’s key financial scores:
Northern Trust shows a very favorable discounted cash flow score of 5 and a favorable return on equity score of 4. Return on assets is moderate at 3, while debt to equity, price to earnings, and price to book scores are all moderate at 2, reflecting mixed financial strength and valuation metrics.
Analysis of the company’s bankruptcy risk
Northern Trust Corporation’s Altman Z-Score places it in the distress zone, indicating a higher risk of financial distress and potential bankruptcy:
Is the company in good financial health?
The Piotroski Score diagram provides insight into the company’s financial strength based on nine critical criteria:
With a Piotroski Score of 7, Northern Trust demonstrates strong financial health, suggesting solid profitability, efficiency, and financial stability despite the distress zone indicated by its Altman Z-Score.
Competitive Landscape & Sector Positioning
This sector analysis examines Northern Trust Corporation’s strategic positioning, revenue segments, key products, and main competitors. I will assess whether Northern Trust holds a competitive advantage within the asset management industry.
Strategic Positioning
Northern Trust Corporation maintains a diversified product portfolio with two main segments: Asset Servicing, generating $4.37B, and Wealth Management, $3.21B in 2024. Geographically, it balances domestic ($6.05B) and foreign ($2.24B) revenues, reflecting a broad global exposure.
Revenue by Segment
This pie chart illustrates Northern Trust Corporation’s revenue distribution by segment for the fiscal year 2024.
In 2024, the Asset Servicing Segment led revenues with $4.37B, followed by Wealth Management at $3.21B. Wealth Management showed steady growth from $2.88B in 2023, while Asset Servicing emerged as a significant revenue driver. The concentration between these two segments highlights the company’s focus, with Treasury and Other excluded due to negative or negligible values in recent years, indicating limited contribution and potential risk concentration in core segments.
Key Products & Brands
The following table summarizes Northern Trust Corporation’s main products and services across its key business segments:
| Product | Description |
|---|---|
| Asset Servicing Segment | Provides asset servicing and related services including custody, fund administration, investment operations outsourcing, risk analytics, securities lending, foreign exchange, treasury management, brokerage, transition management, banking, and cash management. Serves institutions such as retirement funds, endowments, insurance companies, and sovereign wealth funds. |
| Wealth Management Segment | Offers trust, investment management, custody, philanthropic financial consulting, guardianship, estate administration, family business consulting, financial education, brokerage, and private and business banking. Caters to high-net-worth individuals, families, business owners, and professionals. |
| Asset Management Services | Includes active and passive equity and fixed income strategies, cash management, alternative asset classes like private equity and hedge funds of funds, multi-manager advisory services via various investment vehicles, and overlay risk management services. |
Northern Trust’s product portfolio spans comprehensive asset servicing and wealth management solutions, addressing both institutional and high-net-worth clients with diversified investment and banking services.
Main Competitors
There are 11 competitors in total, with the table below listing the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| Blackstone Inc. | 191B |
| BlackRock, Inc. | 168B |
| KKR & Co. Inc. | 115B |
| The Bank of New York Mellon Corporation | 82B |
| Ares Management Corporation | 55B |
| Ameriprise Financial, Inc. | 46B |
| State Street Corporation | 36B |
| Northern Trust Corporation | 26B |
| T. Rowe Price Group, Inc. | 23B |
| Franklin Resources, Inc. | 12B |
Northern Trust Corporation ranks 8th among its competitors, holding about 15% of the market cap of the sector leader, Blackstone Inc. The company is positioned below both the average market cap of the top 10 (75B) and the median market cap in the sector (46B). It maintains a significant 28% gap above its closest competitor above, indicating a moderate buffer in market capitalization within its peer group.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does NTRS have a competitive advantage?
Northern Trust Corporation currently does not present a strong competitive advantage, as it is shedding value with a ROIC below its WACC by about 10%, despite a growing ROIC trend. Its overall moat status is slightly unfavorable, reflecting value destruction coupled with improving profitability metrics.
Looking ahead, Northern Trust’s extensive asset servicing and wealth management offerings position it to explore opportunities in institutional and high-net-worth client segments. Expansion in foreign markets and innovation in asset management products could support future growth potential.
SWOT Analysis
This SWOT analysis aims to highlight Northern Trust Corporation’s key internal strengths and weaknesses alongside external opportunities and threats to inform investment decisions.
Strengths
- strong brand with 135+ years of history
- diversified asset management and wealth services
- favorable net margin of 12.15%
Weaknesses
- recent 1-year revenue decline of -9.93%
- weak liquidity ratios (current ratio 0.41)
- high interest expense at 43.45% of EBIT
Opportunities
- growing global wealth management demand
- expansion in alternative asset classes
- rising profitability trend (ROIC growth)
Threats
- intense competition in asset management
- economic downturn risks impacting asset values
- regulatory and interest rate pressures
Northern Trust benefits from a solid reputation and diversified offerings but faces short-term revenue and liquidity challenges. Opportunities lie in leveraging wealth growth and alternative assets, while risks stem from competitive and macroeconomic uncertainties. Strategic focus should balance growth initiatives with cautious financial management.
Stock Price Action Analysis
The weekly stock chart of Northern Trust Corporation (NTRS) illustrates its price movement over the past 100 weeks with recent activity highlighting short-term trends and volatility:
Trend Analysis
Over the past two years, NTRS stock gained 79.81%, indicating a bullish trend with price acceleration. The stock ranged between a low of 81.45 and a high of 148.63, showing significant upward momentum supported by a 19.4 standard deviation. Recent weeks show a 14.37% rise with moderate volatility and a steady slope of 1.96.
Volume Analysis
Trading volume over the last three months is decreasing despite clear buyer dominance, who account for 69.6% of volume. This buyer-driven activity suggests sustained investor interest but with lower overall market participation, possibly indicating cautious optimism or consolidation.
Target Prices
Analysts show a moderately optimistic outlook for Northern Trust Corporation (NTRS) with a solid target consensus.
| Target High | Target Low | Consensus |
|---|---|---|
| 160 | 130 | 143.17 |
The target prices indicate a potential upside from current levels, reflecting confidence in the company’s growth prospects while acknowledging some risk with the low target near 130.
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Analyst & Consumer Opinions
This section examines the latest analyst ratings and consumer feedback concerning Northern Trust Corporation (NTRS).
Stock Grades
The latest verified analyst ratings for Northern Trust Corporation show a consistent view across several reputable firms as follows:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Outperform | 2026-01-23 |
| Morgan Stanley | Maintain | Underweight | 2026-01-23 |
| Evercore ISI Group | Maintain | In Line | 2026-01-23 |
| Wells Fargo | Maintain | Equal Weight | 2026-01-23 |
| TD Cowen | Maintain | Buy | 2026-01-07 |
| Barclays | Maintain | Equal Weight | 2026-01-05 |
| Citigroup | Maintain | Neutral | 2025-12-30 |
| Morgan Stanley | Maintain | Underweight | 2025-12-17 |
| TD Cowen | Maintain | Buy | 2025-10-23 |
| Wells Fargo | Maintain | Equal Weight | 2025-10-23 |
Overall, the grades reveal a mixed sentiment with a slight leaning toward neutrality; several firms maintain “Equal Weight” or “Neutral” ratings, while a few support a “Buy” or “Outperform” stance and others recommend “Underweight.” The consensus from 34 analysts classifies the stock as a “Hold.”
Consumer Opinions
Northern Trust Corporation (NTRS) has garnered a mix of praise and constructive criticism from its customer base, reflecting varied experiences across its services.
| Positive Reviews | Negative Reviews |
|---|---|
| Excellent wealth management and personalized service | Customer support can be slow during peak times |
| Strong digital platform with intuitive tools | Fees are considered high by some clients |
| Reliable investment advice with solid returns | Limited branch locations in certain regions |
Overall, consumers appreciate Northern Trust’s personalized wealth management and reliable digital tools. However, some express concerns about service response times and fee structures, indicating room for improvement in customer support and cost competitiveness.
Risk Analysis
Below is a table summarizing key risks associated with Northern Trust Corporation (NTRS), highlighting their likelihood and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Financial Stability | Altman Z-Score in distress zone indicates high bankruptcy risk | High | High |
| Liquidity | Low current and quick ratios (0.41) suggest liquidity constraints | Medium | Medium |
| Leverage | Debt-to-equity ratio unfavorable at 1.27, increasing financial risk | Medium | Medium |
| Market Volatility | Beta of 1.285 indicates higher sensitivity to market fluctuations | High | Medium |
| Operational Efficiency | Low asset turnover (0.08) may limit growth and profitability | Medium | Medium |
The most critical concerns are Northern Trust’s Altman Z-Score placing it in the distress zone, signaling heightened bankruptcy risk, and liquidity weaknesses reflected in unfavorable current and quick ratios. Market volatility also poses significant risks given the stock’s above-average beta. Investors should carefully monitor these factors and manage exposure accordingly.
Should You Buy Northern Trust Corporation?
Northern Trust Corporation appears to be demonstrating improving profitability with growing operational efficiency, yet its competitive moat could be seen as slightly unfavorable due to value destruction. Despite a moderate leverage profile, the overall rating suggests a very favorable investment case with cautious optimism.
Strength & Efficiency Pillars
Northern Trust Corporation exhibits solid profitability metrics, with a net margin of 12.15% and a return on equity of 13.4%, reflecting moderate operational efficiency. Its Piotroski Score of 7 further signals strong financial health, underscoring effective management and sound fundamentals. Despite a return on invested capital (ROIC) of 6.78% trailing the weighted average cost of capital (WACC) at 16.83%, indicating the company is currently not a value creator, the improving ROIC trend suggests growing operational efficiency. The Altman Z-Score of -0.39 places it in the distress zone, highlighting financial distress risks that require close monitoring.
Weaknesses and Drawbacks
Several red flags temper Northern Trust’s profile. The company’s low current ratio of 0.41 and quick ratio of 0.41 reveal liquidity concerns, potentially limiting its ability to cover short-term obligations. A debt-to-equity ratio of 1.27 indicates elevated leverage, heightening financial risk especially given an interest coverage ratio of just 0.38, which suggests difficulty servicing debt. While valuation metrics remain moderate with a price-to-earnings ratio of 14.75 and price-to-book of 1.98, pressure from declining revenue (down 9.93% year-over-year) and negative profit growth trends pose additional challenges that could weigh on investor sentiment.
Our Verdict about Northern Trust Corporation
Northern Trust’s long-term fundamental profile may appear moderately favorable due to consistent profitability and strong financial scores like Piotroski. Coupled with a bullish overall price trend and recent buyer dominance signaling positive market interest, the company suggests potential for recovery and growth. However, liquidity strains, elevated debt levels, and financial distress indicators recommend a cautious stance. Despite the technical strength, investors might consider a wait-and-see approach to better assess risk before committing capital.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Is It Too Late To Consider Northern Trust (NTRS) After Its Strong Five Year Run? – Yahoo Finance (Jan 24, 2026)
- Northern Trust (NTRS): Company Profile, Stock Price, News, Rankings – Fortune (Jan 21, 2026)
- Northern Trust Corporation Reports Fourth Quarter 2025 Financial Results – Chartmill (Jan 22, 2026)
- Northern Trust (NTRS) Margin Decline Tests Bullish Views After FY 2025 Earnings – simplywall.st (Jan 24, 2026)
- Wilkins Investment Counsel Inc. Trims Holdings in Northern Trust Corporation $NTRS – MarketBeat (Jan 22, 2026)
For more information about Northern Trust Corporation, please visit the official website: northerntrust.com
