On Tuesday, Deutsche Bank (ETR:DBKGn) maintained its Hold rating on Northern Trust (NASDAQ:NTRS) with a steady price target of $80.00. The firm has initiated a Buy Catalyst Call on the financial services company, hedged against the S&P 500 Index, anticipating that Northern Trust will announce stronger-than-expected net interest income (NII) for the first quarter. Current projections by Deutsche Bank stand 6% above the consensus, forecasting $504 million, which is slightly higher than the company's own outlook of $480-500 million.
The bank's analyst projects that Northern Trust will experience significant NII growth throughout 2024 compared to its peers, estimating a decrease of only 1% versus an 8-9% decline among competitors. This forecast is bolstered by the expected deployment of proceeds from the sale of Visa (NYSE:V) shares.
Expense control is another factor expected to contribute to share performance, despite anticipated year-over-year growth in expenses exceeding 5% in the first quarter, as indicated by Northern Trust's management commentary.
Despite these positive indicators, Deutsche Bank does not identify fee revenue as a driving factor for its Buy Catalyst Call, noting that their estimates align with the general consensus. Overall, the expectation is that Northern Trust will outperform its trust bank peers, including BNY Mellon (NYSE:BK) and State Street (NYSE:STT), in share price performance during the upcoming first-quarter earnings season.
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