The Northern Trust stock price has been under pressure in the past few months as the banking sector recoils. The NTRS share price is trading at $96.61, which is about 27.68% below the highest level in 2021. Its price action has also tracked that of the SPDR Bank ETF (KBE).
Northern Trust has struggled
Northern Trust is a leading financial services company valued at over $20 billion. It has over $187 billion in total assets. The company provides a number of services that are mostly geared toward wealthy individuals, governments, trust funds, and companies.
Northern Trust operates in three main segments: Corporate & Institutional services, asset management, and Wealth Management. Its most recent 10k showed that the total C&S funds under its custody are worth over $15.1 trillion. At the same time, its total assets under custody are $11.5 trillion while assets under management have jumped to over $1.1 trillion.
The Northern Trust stock price has retreated in 2022 as market conditions change. The Federal Reserve has already hiked interest rates by 150 basis points this year. It has also hinted that it will continue hiking interest rates this year, thanks to the strong labor market and higher inflation rate. Like other banks, Northern Trust benefits in a period of high-interest rates.
On the other hand, many wealthy individuals that Northern Trust caters to have felt the pain of the falling asset prices. The Dow Jones, Nasdaq 100, and S&P 500 indices have all lost over 20% this year alone. Similarly, the prices of cryptocurrencies has crashed thus affecting its recently launched Digital Assets and Financial Markets division.
NTRS earnings ahead
The next key catalyst for the Northern Trust share price will be the company’s quarterly results that are scheduled on July 20th. Analysts polled by Reuters expect that the company’s revenue will be $1.77 billion. This figure will be bigger than the $1.73 billion that it made in the previous quarter. Analysts alsos believe that its GAAP earnings per share will be $1.96.
While comps will be difficult this month, there is a likelihood that the company will beat what analysts are expecting. Besides, it has had revenue and EPS beats in all quarters but two since 2017.
The NTRS stock price will also react to the upcoming earnings by American banks like Morgan Stanley, Goldman Sachs, and JP Morgan.
Analysts have a good view of Northern Trust. The average estimate for the stock is $124, which is higher than the current $96. However, most of them have recently reduced their target because of the ongoing market conditions. Those at Morgan Stanley, Wells Fargo, and RBC downgraded the stock to $110, $121, and $110, respectively.
Northern Trust stock price forecast
The daily chart shows that the NTRS share price has been in a strong bearish trend in the past few days. The shares have moved below the 25-day and 50-day moving averages. Further, it has declined below the important support level at $102.30 while the Stochastic Oscillator has moved above the neutral point at 50.
Therefore, while the stock has pulled back slightly recently, I suspect that it will resume the bearish trend ahead of the company’s earnings. That’s because the company is forming a break and retest pattern, which is usually a bearish sign.