Tremendous Second-Quarter Results for Northern Trust; Raising Our Fair Value Estimate
Wide-moat Northern Trust reported excellent second-quarter results that were again well ahead of our expectations for the firm. We are increasing our fair value estimate to $95 per share from $88 per share to reflect this, which is 2.4 times book value as of June and 12.9 times our 2019 earnings estimate. Northern Trust reported a return on average common equity of 16.5%, improving on the 16% level we saw last quarter. With management previously expecting a normalized return on equity range of 1...Northern Trust is a financial holding company. Through its subsidiaries, including The Northern Trust Company, the company provides wealth management, asset servicing, asset management and banking solutions. The company focuses on managing and servicing client assets through two segments: Corporate and Institutional Services, which provides asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors; and Wealth Management, which focuses on individuals and families, business owners, executives, retirees, and privately-held businesses in its target markets.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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