RBC Capital has revised upward its price target for Northern Trust Corporation (NASDAQ:NTRS) to $159 from its prior target of $139, while sustaining an Outperform stance on the stock. The trust company’s shares currently trade near their annual peak, last noted at $153.12 against a 52-week high of $157.60, reflecting a formidable 43.63% total return over the prior 12 months.
This adjustment by RBC Capital follows Northern Trust’s reported fourth-quarter 2025 financial results, which the firm characterized as "very strong". The company demonstrated solid increases in revenues alongside positive operating leverage, culminating in a trailing twelve-month revenue figure of $7.93 billion.
In outlining Northern Trust's strategic ambitions, RBC emphasized the company’s medium-term focus on achieving a mid-teens return on equity (ROE), surpassing 33% pre-tax margins, and maintaining an expense-to-trust-fees ratio between 105% and 110%. Already, the company has reached a 14% return on common equity, complemented by a consistent dividend payment streak lasting 55 years and a current dividend yield of 2.09%.
Market analysts at RBC drew attention to the pivotal role that ongoing market conditions and yield curve behavior will play in influencing Northern Trust's profitability dynamics moving forward. The stock is presently valued at a price-to-earnings ratio of 16.84 and exhibits a price/earnings-to-growth (PEG) ratio at 2.37, indicative of a relatively elevated valuation compared to anticipated earnings growth over the near term.
Despite the backdrop of potential global macroeconomic uncertainties, RBC remains confident that Northern Trust’s strong operational track record and leadership team place it in a position to generate steady results through market cycles. InvestingPro data reinforces this view with Northern Trust achieving a "GOOD" overall financial health score of 2.82. Its fair value evaluation suggests the stock may be modestly undervalued.
Complementing RBC’s assessment, Northern Trust also surpassed expectations in its fourth-quarter 2025 earnings release, reporting earnings per share of $2.42 against analyst forecasts of $2.36. Revenue likewise outpaced projections, amounting to $2.14 billion versus an anticipated $2.06 billion. Evercore ISI echoed this positive momentum, adjusting its price target on Northern Trust to $155 from $142 while maintaining an "In Line" rating, and citing robust market levels across the firm's diverse business segments.
Collectively, these indicators position Northern Trust as a strong performer within the financial services sector, demonstrating resilience amidst competitive and macroeconomic challenges.