Intrinsic value of Northern Trust - NTRS

Previous Close

$107.43

  Intrinsic Value

$180.11

stock screener

  Rating & Target

str. buy

+68%

Previous close

$107.43

 
Intrinsic value

$180.11

 
Up/down potential

+68%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as NTRS.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NTRS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.90
  14.40
  13.46
  12.61
  11.85
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.65
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.67
  5.61
  5.55
  5.49
  5.44
Revenue, $m
  5,117
  5,854
  6,642
  7,480
  8,366
  9,300
  10,282
  11,309
  12,383
  13,503
  14,670
  15,885
  17,148
  18,460
  19,824
  21,242
  22,715
  24,246
  25,839
  27,495
  29,219
  31,014
  32,884
  34,832
  36,864
  38,984
  41,196
  43,506
  45,919
  48,441
  51,078
Variable operating expenses, $m
 
  4,073
  4,614
  5,189
  5,798
  6,440
  7,114
  7,820
  8,557
  9,327
  10,128
  10,911
  11,778
  12,680
  13,616
  14,590
  15,602
  16,654
  17,748
  18,885
  20,069
  21,302
  22,586
  23,925
  25,320
  26,776
  28,296
  29,883
  31,540
  33,272
  35,083
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,600
  4,073
  4,614
  5,189
  5,798
  6,440
  7,114
  7,820
  8,557
  9,327
  10,128
  10,911
  11,778
  12,680
  13,616
  14,590
  15,602
  16,654
  17,748
  18,885
  20,069
  21,302
  22,586
  23,925
  25,320
  26,776
  28,296
  29,883
  31,540
  33,272
  35,083
Operating income, $m
  1,517
  1,781
  2,028
  2,290
  2,568
  2,860
  3,168
  3,490
  3,826
  4,177
  4,542
  4,974
  5,370
  5,781
  6,208
  6,652
  7,113
  7,593
  8,091
  8,610
  9,150
  9,712
  10,297
  10,908
  11,544
  12,208
  12,900
  13,624
  14,379
  15,169
  15,995
EBITDA, $m
  1,890
  1,948
  2,210
  2,489
  2,784
  3,095
  3,421
  3,763
  4,120
  4,493
  4,881
  5,286
  5,706
  6,142
  6,596
  7,068
  7,558
  8,068
  8,598
  9,149
  9,722
  10,320
  10,942
  11,590
  12,266
  12,972
  13,708
  14,476
  15,279
  16,118
  16,996
Interest expense (income), $m
  182
  3,682
  4,162
  4,739
  5,353
  6,002
  6,687
  7,405
  8,158
  8,945
  9,766
  10,621
  11,510
  12,435
  13,397
  14,396
  15,434
  16,514
  17,635
  18,802
  20,016
  21,278
  22,593
  23,963
  25,390
  26,879
  28,432
  30,052
  31,744
  33,512
  35,360
Earnings before tax, $m
  1,517
  -1,901
  -2,134
  -2,449
  -2,785
  -3,142
  -3,519
  -3,916
  -4,332
  -4,768
  -5,224
  -5,646
  -6,140
  -6,655
  -7,189
  -7,744
  -8,321
  -8,921
  -9,544
  -10,192
  -10,866
  -11,567
  -12,296
  -13,055
  -13,847
  -14,671
  -15,531
  -16,429
  -17,365
  -18,343
  -19,365
Tax expense, $m
  484
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  1,033
  -1,901
  -2,134
  -2,449
  -2,785
  -3,142
  -3,519
  -3,916
  -4,332
  -4,768
  -5,224
  -5,646
  -6,140
  -6,655
  -7,189
  -7,744
  -8,321
  -8,921
  -9,544
  -10,192
  -10,866
  -11,567
  -12,296
  -13,055
  -13,847
  -14,671
  -15,531
  -16,429
  -17,365
  -18,343
  -19,365

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5,332
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  123,927
  136,136
  154,460
  173,943
  194,560
  216,288
  239,107
  263,007
  287,982
  314,034
  341,172
  369,413
  398,781
  429,307
  461,030
  493,996
  528,256
  563,870
  600,903
  639,426
  679,517
  721,259
  764,740
  810,056
  857,308
  906,601
  958,049
  1,011,770
  1,067,889
  1,126,537
  1,187,852
Adjusted assets (=assets-cash), $m
  118,595
  136,136
  154,460
  173,943
  194,560
  216,288
  239,107
  263,007
  287,982
  314,034
  341,172
  369,413
  398,781
  429,307
  461,030
  493,996
  528,256
  563,870
  600,903
  639,426
  679,517
  721,259
  764,740
  810,056
  857,308
  906,601
  958,049
  1,011,770
  1,067,889
  1,126,537
  1,187,852
Revenue / Adjusted assets
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
Average production assets, $m
  501
  574
  651
  733
  820
  911
  1,008
  1,108
  1,214
  1,323
  1,438
  1,557
  1,680
  1,809
  1,943
  2,082
  2,226
  2,376
  2,532
  2,695
  2,863
  3,039
  3,223
  3,414
  3,613
  3,820
  4,037
  4,264
  4,500
  4,747
  5,006
Working capital, $m
  0
  2,927
  3,321
  3,740
  4,183
  4,650
  5,141
  5,655
  6,192
  6,752
  7,335
  7,942
  8,574
  9,230
  9,912
  10,621
  11,358
  12,123
  12,919
  13,748
  14,610
  15,507
  16,442
  17,416
  18,432
  19,492
  20,598
  21,753
  22,960
  24,221
  25,539
Total debt, $m
  110,545
  118,910
  135,402
  152,937
  171,492
  191,047
  211,584
  233,094
  255,572
  279,019
  303,443
  328,860
  355,291
  382,764
  411,315
  440,984
  471,818
  503,871
  537,201
  571,872
  607,954
  645,521
  684,654
  725,439
  767,965
  812,329
  858,632
  906,981
  957,488
  1,010,272
  1,065,455
Total liabilities, $m
  114,157
  122,522
  139,014
  156,549
  175,104
  194,659
  215,196
  236,706
  259,184
  282,631
  307,055
  332,472
  358,903
  386,376
  414,927
  444,596
  475,430
  507,483
  540,813
  575,484
  611,566
  649,133
  688,266
  729,051
  771,577
  815,941
  862,244
  910,593
  961,100
  1,013,884
  1,069,067
Total equity, $m
  9,770
  13,614
  15,446
  17,394
  19,456
  21,629
  23,911
  26,301
  28,798
  31,403
  34,117
  36,941
  39,878
  42,931
  46,103
  49,400
  52,826
  56,387
  60,090
  63,943
  67,952
  72,126
  76,474
  81,006
  85,731
  90,660
  95,805
  101,177
  106,789
  112,654
  118,785
Total liabilities and equity, $m
  123,927
  136,136
  154,460
  173,943
  194,560
  216,288
  239,107
  263,007
  287,982
  314,034
  341,172
  369,413
  398,781
  429,307
  461,030
  493,996
  528,256
  563,870
  600,903
  639,427
  679,518
  721,259
  764,740
  810,057
  857,308
  906,601
  958,049
  1,011,770
  1,067,889
  1,126,538
  1,187,852
Debt-to-equity ratio
  11.315
  8.730
  8.770
  8.790
  8.810
  8.830
  8.850
  8.860
  8.870
  8.880
  8.890
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
  8.940
  8.940
  8.940
  8.950
  8.950
  8.950
  8.960
  8.960
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
Adjusted equity ratio
  0.082
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,033
  -1,901
  -2,134
  -2,449
  -2,785
  -3,142
  -3,519
  -3,916
  -4,332
  -4,768
  -5,224
  -5,646
  -6,140
  -6,655
  -7,189
  -7,744
  -8,321
  -8,921
  -9,544
  -10,192
  -10,866
  -11,567
  -12,296
  -13,055
  -13,847
  -14,671
  -15,531
  -16,429
  -17,365
  -18,343
  -19,365
Depreciation, amort., depletion, $m
  373
  167
  182
  198
  216
  234
  253
  274
  295
  317
  339
  311
  336
  362
  389
  416
  445
  475
  506
  539
  573
  608
  645
  683
  723
  764
  807
  853
  900
  949
  1,001
Funds from operations, $m
  1,728
  -1,735
  -1,952
  -2,250
  -2,569
  -2,908
  -3,266
  -3,642
  -4,038
  -4,452
  -4,884
  -5,335
  -5,804
  -6,293
  -6,800
  -7,328
  -7,876
  -8,446
  -9,038
  -9,653
  -10,293
  -10,959
  -11,651
  -12,373
  -13,124
  -13,907
  -14,724
  -15,576
  -16,465
  -17,394
  -18,364
Change in working capital, $m
  218
  368
  394
  419
  443
  467
  491
  514
  537
  560
  583
  607
  631
  656
  682
  709
  737
  766
  796
  828
  862
  897
  935
  974
  1,016
  1,060
  1,106
  1,155
  1,207
  1,261
  1,318
Cash from operations, $m
  1,510
  -2,103
  -2,346
  -2,669
  -3,012
  -3,375
  -3,756
  -4,156
  -4,575
  -5,012
  -5,468
  -5,942
  -6,436
  -6,949
  -7,482
  -8,037
  -8,613
  -9,212
  -9,834
  -10,481
  -11,155
  -11,856
  -12,586
  -13,347
  -14,140
  -14,967
  -15,830
  -16,731
  -17,672
  -18,655
  -19,682
Maintenance CAPEX, $m
  0
  -100
  -115
  -130
  -147
  -164
  -182
  -202
  -222
  -243
  -265
  -288
  -311
  -336
  -362
  -389
  -416
  -445
  -475
  -506
  -539
  -573
  -608
  -645
  -683
  -723
  -764
  -807
  -853
  -900
  -949
New CAPEX, $m
  -473
  -73
  -77
  -82
  -87
  -92
  -96
  -101
  -105
  -110
  -114
  -119
  -124
  -129
  -134
  -139
  -144
  -150
  -156
  -162
  -169
  -176
  -183
  -191
  -199
  -208
  -217
  -226
  -236
  -247
  -258
Cash from investing activities, $m
  -10,192
  -173
  -192
  -212
  -234
  -256
  -278
  -303
  -327
  -353
  -379
  -407
  -435
  -465
  -496
  -528
  -560
  -595
  -631
  -668
  -708
  -749
  -791
  -836
  -882
  -931
  -981
  -1,033
  -1,089
  -1,147
  -1,207
Free cash flow, $m
  -8,682
  -2,276
  -2,538
  -2,881
  -3,246
  -3,630
  -4,035
  -4,458
  -4,902
  -5,364
  -5,847
  -6,349
  -6,871
  -7,414
  -7,978
  -8,564
  -9,174
  -9,807
  -10,465
  -11,150
  -11,863
  -12,605
  -13,377
  -14,182
  -15,022
  -15,897
  -16,811
  -17,765
  -18,761
  -19,802
  -20,890
Issuance/(repayment) of debt, $m
  994
  13,697
  16,492
  17,535
  18,555
  19,554
  20,538
  21,510
  22,478
  23,447
  24,424
  25,417
  26,431
  27,473
  28,551
  29,669
  30,834
  32,053
  33,330
  34,671
  36,082
  37,567
  39,133
  40,784
  42,526
  44,364
  46,303
  48,349
  50,507
  52,783
  55,183
Issuance/(repurchase) of shares, $m
  316
  5,745
  3,966
  4,397
  4,847
  5,315
  5,801
  6,306
  6,830
  7,374
  7,937
  8,470
  9,077
  9,707
  10,361
  11,041
  11,747
  12,482
  13,248
  14,044
  14,875
  15,741
  16,644
  17,587
  18,572
  19,601
  20,676
  21,801
  22,977
  24,208
  25,496
Cash from financing (excl. dividends), $m  
  7,893
  19,442
  20,458
  21,932
  23,402
  24,869
  26,339
  27,816
  29,308
  30,821
  32,361
  33,887
  35,508
  37,180
  38,912
  40,710
  42,581
  44,535
  46,578
  48,715
  50,957
  53,308
  55,777
  58,371
  61,098
  63,965
  66,979
  70,150
  73,484
  76,991
  80,679
Total cash flow (excl. dividends), $m
  -731
  17,166
  17,920
  19,051
  20,156
  21,239
  22,304
  23,358
  24,406
  25,456
  26,515
  27,538
  28,637
  29,767
  30,934
  32,146
  33,408
  34,728
  36,112
  37,565
  39,094
  40,703
  42,400
  44,189
  46,076
  48,068
  50,168
  52,385
  54,723
  57,189
  59,790
Retained Cash Flow (-), $m
  -1,064
  -5,745
  -3,966
  -4,397
  -4,847
  -5,315
  -5,801
  -6,306
  -6,830
  -7,374
  -7,937
  -8,470
  -9,077
  -9,707
  -10,361
  -11,041
  -11,747
  -12,482
  -13,248
  -14,044
  -14,875
  -15,741
  -16,644
  -17,587
  -18,572
  -19,601
  -20,676
  -21,801
  -22,977
  -24,208
  -25,496
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  11,421
  13,954
  14,654
  15,309
  15,924
  16,503
  17,052
  17,576
  18,082
  18,578
  19,068
  19,560
  20,060
  20,573
  21,105
  21,661
  22,246
  22,864
  23,521
  24,219
  24,963
  25,756
  26,602
  27,505
  28,467
  29,492
  30,584
  31,746
  32,981
  34,293
Discount rate, %
 
  14.10
  14.81
  15.55
  16.32
  17.14
  18.00
  18.90
  19.84
  20.83
  21.87
  22.97
  24.12
  25.32
  26.59
  27.92
  29.31
  30.78
  32.32
  33.93
  35.63
  37.41
  39.28
  41.25
  43.31
  45.47
  47.75
  50.13
  52.64
  55.27
  58.04
PV of cash for distribution, $m
 
  10,010
  10,587
  9,499
  8,362
  7,220
  6,115
  5,077
  4,131
  3,293
  2,570
  1,962
  1,464
  1,067
  758
  525
  354
  232
  148
  91
  55
  32
  18
  9
  5
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  81.0
  72.6
  65.2
  58.7
  52.9
  47.8
  43.3
  39.2
  35.6
  32.3
  29.4
  26.8
  24.4
  22.3
  20.4
  18.6
  17.0
  15.5
  14.2
  13.0
  11.9
  10.9
  10.0
  9.2
  8.4
  7.7
  7.1
  6.5
  5.9
  5.4

Northern Trust Corporation is a financial holding company. The Company provides asset servicing, fund administration, asset management, fiduciary and banking solutions for corporations, institutions, families and individuals across the world. Its segments include Corporate & Institutional Services (C&IS), Wealth Management, and Treasury and Other. The C&IS segment is a provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds and other institutional investors around the globe. The Wealth Management segment provides trust, investment management, custody and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services, and private and business banking. It conducts its business through various subsidiaries.

FINANCIAL RATIOS  of  Northern Trust (NTRS)

Valuation Ratios
P/E Ratio 23.8
Price to Sales 4.8
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 16.3
Price to Free Cash Flow 23.7
Growth Rates
Sales Growth Rate 5.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9%
Cap. Spend. - 3 Yr. Gr. Rate 4.2%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 31.8%
Total Debt to Equity 1131.5%
Interest Coverage 9
Management Effectiveness
Return On Assets 1%
Ret/ On Assets - 3 Yr. Avg. 0.9%
Return On Total Capital 0.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.9%
Return On Equity 11.2%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0
Profitability Ratios
Gross Margin 97%
Gross Margin - 3 Yr. Avg. 97%
EBITDA Margin 40.5%
EBITDA Margin - 3 Yr. Avg. 39.9%
Operating Margin 29.6%
Oper. Margin - 3 Yr. Avg. 28.9%
Pre-Tax Margin 29.6%
Pre-Tax Margin - 3 Yr. Avg. 28.9%
Net Profit Margin 20.2%
Net Profit Margin - 3 Yr. Avg. 19.5%
Effective Tax Rate 31.9%
Eff/ Tax Rate - 3 Yr. Avg. 32.4%
Payout Ratio 34.5%

NTRS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTRS stock intrinsic value calculation we used $5117 million for the last fiscal year's total revenue generated by Northern Trust. The default revenue input number comes from 2016 income statement of Northern Trust. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NTRS stock valuation model: a) initial revenue growth rate of 14.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.1%, whose default value for NTRS is calculated based on our internal credit rating of Northern Trust, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Northern Trust.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NTRS stock the variable cost ratio is equal to 69.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NTRS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Northern Trust.

Corporate tax rate of 27% is the nominal tax rate for Northern Trust. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NTRS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NTRS are equal to 9.8%.

Life of production assets of 2.7 years is the average useful life of capital assets used in Northern Trust operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NTRS is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9770 million for Northern Trust - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 228.351 million for Northern Trust is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Northern Trust at the current share price and the inputted number of shares is $24.5 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ NY Gov. Cuomo Announces Tax 'Fairness Fix'   [08:38AM  Bloomberg Video]
▶ Northern Trust Gets IBD Stock Rating Upgrade   [Jan-17-18 03:00AM  Investor's Business Daily]
▶ Northern Trust Trying To Close In On Key Technical Benchmark   [03:00AM  Investor's Business Daily]
▶ Analyzing State Streets Balance Sheet   [Dec-19-17 10:31AM  Market Realist]
▶ Northern Trust Raises Prime Rate   [Dec-14-17 11:05AM  Business Wire]
▶ JPMorgan Chase to offer discounts like Amazon   [Dec-08-17 11:08AM  Yahoo Finance Video]
▶ Northern Trust Earns IBD Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ Bitcoin continues onward and upward   [Nov-28-17 11:09AM  Yahoo Finance Video]
▶ Northern Trust's McDonald Sees Stocks Advancing Higher   [Oct-19-17 12:53PM  Bloomberg Video]
▶ Northern Trust beats 3Q profit forecasts   [07:38AM  Associated Press]
▶ Northern Trust names new CEO   [Oct-17-17 06:20PM  American City Business Journals]
▶ Northern Trust's ETF Business Is Off to a Good Start   [Oct-13-17 07:00AM  Morningstar]
▶ Heres how Oranjs 'un-robo-advisor' saves you money   [Oct-10-17 01:21PM  Yahoo Finance Video]
▶ Which companies will do well under One Belt, One-Road?   [Oct-09-17 08:29PM  CNBC Videos]
▶ Northern Trust Supports Hurricane, Earthquake Relief   [Oct-04-17 10:43AM  Business Wire]
▶ Northern Trust Names New Head of Japan Office   [Oct-03-17 04:52AM  Business Wire]
▶ How Wall Street Analysts View State Street   [10:39AM  Market Realist]
▶ Northern Trust Appoints St. Louis President   [Sep-20-17 09:00AM  Business Wire]
▶ Goodman Theatre board elects Northern Trust executive to top post   [Sep-19-17 02:10PM  American City Business Journals]
Financial statements of NTRS
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