Deutsche Bank opened a Buy Catalyst Call on Northern Trust (NASDAQ:NTRS) hedged against the S&P 500 Index, as analyst Brian Bedell believes the trust bank should report better-than expected net interest income for Q1.
“We also model significantly better full-year 2024 NII growth vs. peers (-1% at Northern vs. down 8-9% at peers, helped by depoloyment of proceeds received from Visa share sale),” Bedell wrote in a note to clients. “We believe NII growth is an important driver for the shares.”
The company is expected to continue exercising expense discipline, another driver for the shares, but Q1 Y/Y growth could be elevated, at more than 5%, based on management’s Q1 commentary, the analyst said.
He does not see fee revenue as a catalyst for the call, as Deutsche Bank is generally in line with consensus on that point.
“We expect NTRS to have the best share price performance vs. trust bank peers — BNY Mellon (BK) and State Street (STT) — during their 1Q earnings season,” Bedell said.
The SA Quant rating and average Wall Street rating have less bullish views on the stock, with a Hold rating at both.