Jefferies Reports Another Round Of Downward Revisions On Northern Trust

According to Jefferies, Northern Trust NTRS saw another round of downward revisions. Jefferies said that it cut its estimates following another sizeable EPS miss to reflect a lower net interest margin and higher cost base. “Strong capital ratios and a loyal shareholder base limit downside somewhat, but the stock is not cheap at 15x our 2012 EPS estimate and negative revisions could continue to weigh on sentiment and the P/E multiple. We establish a $52/sh price target by applying a 16x multiple to our 2012 EPS estimate. Our target is 3x lower than the company's historical average, but at a relative premium to the S&P 500 P/E multiple, which is in line with the historical average. Risks to our price objective include lower market levels and a slower-than-expected decline in credit costs.” Northern Trust closed yesterday at $52.19.