Is Northern Trust Corporation (NTRS) overvalued?
On Equity Rank's model estimate, NTRS trades close to its fair value (3% below it). Northern Trust Corporation (NTRS) last closed at $172.76; the multi-method model fair value is $178.33.
| Price | Model fair value | Price vs model |
|---|---|---|
| $172.76 | $178.33 | 3% below |
What the answer rests on
- 6 of 11 valuation methods put NTRS's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, NTRS's free cash flow would need to grow about -9.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 34.1% a year.
- NTRS trades at 14.0 times its last year's earnings, against a median of 13.3 for 97 profitable Asset Management companies.
- Over the past year the price sat below the model fair value on 71% of trading days. The gap ranged from 10% below to 7% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind NTRS's fair value · What prices assume · Other companies