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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Northern Trust Corporation (XNAS:NTRS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NTRS
Name:
NORTHERN TRUST CORPORATION (XNAS:NTRS)
Sector:
597.90M
Industry:
Asset Management
CEO:
Mr. Michael O'Grady
Total Employees:
21,100
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -202.87% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NORTHERN TRUST CORPORATION(NTRS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
93.38
One Month Price Target:
$93.97
Six Month Price Target :
$96.91
Likely Price in One Year's Time:
Ticker:
$100.44
Likely Trading Range Today Under (Normal Volatility)
$93.
Price Upper limit ($) :
$93.78
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$88.65
This week:
$82.79
This month :
$72.21
Other Primary facts
Market Cap:
19.57B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
208.39M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.64%
-18.19%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$115.36
$105.35
$71.40
$81.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$102.09
Buy Put:
Sell Put:
$99.96
$84.64
$86.80
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NTRS
Sharpe Ratio:
0.00%
Comparison:
NTRS, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -99.58% lower than the industry
& is -99.85% lower than the market/S&P 500 average
Average Returns/Yield of
NTRS
Daily returns:
0.01%
Weekly returns:
0.04%
Monthly returns:
0.18%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -76.66% below industry average
Classification:
NTRS, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.05
Statistical test of Returns:
NTRS has yielded a lower return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
2.47%
Weekly Volatility:
5.53%
Monthly Volatility:
11.06%
Yearly Volatility:
38.31%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.65%
Volatility in last five trading days has been -73.66% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.07%
Weekly VaR:
-11.34%
Monthly VaR:
-22.67%
How Much Can the price of
NTRS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-78.54%
This translates to price declining to:
$74.75
This translates to price declining to:
$20.04
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
NTRS is a 60.02% riskier investment compared to the market/S&P 500 & is 37.09% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.84% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NTRS
Beta in relation to market/S&P 500--1.12
Expected beta in 1 year's time:
0.819
Expected beta in 3 year's time:
1.159
Unlevered (debt free) Beta:
0.764
Beta in relation to Nasdaq (XNAS):
0.803
Beta in relation to all global stocks::
0.855
Beta Comparison & Analysis
Beta of competitors/peers::
1.367
Beta is -17.73% lower than peers
Average Industry Beta:
1.694
Beta is -33.62% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.17%
Sustainable growth rate is -71.03% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.087
Alpha is 56.29% above industry average alpha yield
Alpha is -554% below the market average
Analysis of Cost of Capital of
NTRS
Equity cost of capital:
0.109
Equity cost of capital is -26.45% below industry mean WACC
Unlevered (without debt) cost of capital:
7.37%
Before-tax cost of debt:
0.24%
After-tax cost of debt:
0.19%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.19%
WACC is 41.40% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$30.62
Revenue growth rate per share of (3Y):
1.71
Annual revenue growth rate is -71.07% below industry average
EPS:
$7.21
Expected Annual growth rate of EPS (3Y):
2.35%
Expected future EPS growth rate is -91.55% lower than the Asset Management industry
Free cash flow (FCF) per share:
$7.01
Balance sheet equity growth per share: 48.64%
Equity growth rate per share is 130.17% higher than the industry
Debt per share
$33.62
EBITDA per share
$12.30
Valuation Analysis Today of
NTRS
P/E Ratio:
12.72
P/E Ratio of Competitors/Peers:
16.4
P/E ratio is -22.47% lower than main peers & is -21.24% lower than the industry
Stock price/value with industry average P/E ratio: $116.43
NTRS is -19.79% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $37.29
Present value of the expected future dividends only: $25.80
P/S (Price to Sales ratio):
3.05
Price to sales ratio is -55.49% below the industry mean
P/B (Price to book value ratio):
1.71
Price to free cash flow: 13.33
-
Net income growth rate (3Y):
6.67%
Net income growth rate is -95.41% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.63%
Dividend yeild: 3.00%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.80
-
-
Average dividend payment (long-term): $0.70
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 09/08/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 06/10/2022
-
Dividend History:
2022-06-09--$0.70
2021-12-09--$0.70
2021-06-10--$0.70
2022-03-10--$0.70
2021-09-09--$0.70
2021-03-11--$0.70
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
61.40%
Net debt to equity ratio:
-484.54%
Debt to assets ratio:
4.06%
Net debt to assets ratio:
-32.04%
Debt-to-asset ratio is -92.23% below industry average
Ability to repay debt:
Interest coverage ratio:
154.38
Interest coverage ratio is 159.60% more than industry average
Looking forward:
Debt growth rate:
-8.17%
Annual debt growth is 18% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.733
Statistical significance of correlation:
NTRS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is 27.22% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
0.028
Covariance of price movement with the market:
0.041
Kurtosis
12.775
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.318
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NTRS
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
31.48%
Operating profit margin is -33.07% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
22.99%
Effective tax rate is -5.87% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.67%
Return on equity (ROE) is -45.93% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.90%
Return on assets (ROA) is -84.51% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 4.3 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
302.5K
Each employee generates -78% less revenue than industry average revenue per employee
EBITDA generated per employee:
121.5K
Each employee generates -116% less EBITDA than industry average revenue per employee
Profit generated per employee:
73.9K
Each employee generates -106% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
28.3K
Each employee generates -124% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.9M
Each employee generates -124% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
NTRS
HBANN
GRAB HOLDINGS LIMITED (XNAS:GRAB)
Willis Towers Watson Public Limited Company (XNAS:WTW)
ANZU SPECIAL ACQUISITION I UNT (XNAS:ANZUU)
CMLFU
Signature Bank (XNAS:SBNY)
INTERACTIVE BROKERS GROUP, INC. (XNAS:IBKR)
Nasdaq, Inc. (XNAS:NDAQ)
-
Current Analyst Ratings
Strong buy�13%
Buy�13%
Hold�50%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.38B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
1.67B
-
2.54B
2.60B
68.40M
-
-
1.44B
16.60M
521.10M
2.56B
2.01B
1.56B
2.03B
465.50M
1.56B
Statement of Cash Flow
Date:
Period:
130.90M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 208300.00K
Accounts Receivables:
-
Other Working Capital:
- 505700.00K
Other Non-Cash Items:
435.00M
Net Cash Provided by Operating Activities:
746.90M
Investments in PP&E:
- 25800.00K
Net Acquisitions:
-
Purchases of Investments:
- 13701200.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
62.29B
10.48B
72.77B
2.19B
-
-
-
486.00M
702.00M
1.80B
58.08B
-
-
61.07B
233.64B
172.57B
-
-
-
-
-
-
7.01B
-
7.01B
168.16B
161.16B
408.60M
13.34B
- 907000.0K
- 2319300.00K
March 31, 2022 at 6:00:00 AM
-
11.41B
172.57B
68.56B
7.01B
- 55284500.0K
15.80B
8.25B
10.33B
-
-
- 33800.00K
- 150200.00K
- 10132600.00K
- 10316600.00K
- 29500.00K
726.40M
3.78B
3.06B
746.90M
- 149000.00K
597.90M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
NTRS
2023
2024
2025
2026
2027
$116.50
$125.30
$134.77
$144.96
$155.91