Northern Trust Corporation Stock Upgraded (NTRS)

NEW YORK ( TheStreet) -- Northern Trust Corporation (Nasdaq: NTRS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 43.4%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for NORTHERN TRUST CORP is currently very high, coming in at 90.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.50% is above that of the industry average.
  • Net operating cash flow has significantly increased by 1176.85% to $1,391.30 million when compared to the same quarter last year. In addition, NORTHERN TRUST CORP has also vastly surpassed the industry average cash flow growth rate of 391.70%.
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Capital Markets industry.
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Northern Trust Corporation, through its subsidiaries, provides investment management, asset and fund administration, banking solutions, and fiduciary services for corporations, institutions, and affluent individuals worldwide. The company has a P/E ratio of 18, above the average banking industry P/E ratio of 17.3 and above the S&P 500 P/E ratio of 17.7. Northern Trust has a market cap of $10.31 billion and is part of the financial sector and banking industry. Shares are up 12% year to date as of the close of trading on Thursday.

You can view the full Northern Trust Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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