NTRS: Model Update: Adjusting Earnings Estimates

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NTRS: Model Update: Adjusting Earnings Estimates

Well Positioned Over the Long Term: Though

price target and implied return support our Outperform rating. AUCA and AUM levels fluctuate primarily due to market

conditions, we believe over the long term NTRS’s business

Upside scenario model will continue to deliver peer-leading profitability.

Our upside scenario of $214 assumes stronger than expected Over time as market conditions improve and or stabilize,

economic growth with inflation moderating over the next increases in AUCA and AUM should drive revenues higher.

12 months combined with the Federal Reserve cutting the • Return of Capital: During the 1Q26, NTRS declared $151

Federal Funds rate an additional 50-75 basis points over the million in common stock dividends and repurchased $359

next 12 months. Additionally, the outlook for profitability million of common stock. We expect the company to have a

proves to be better than expected. combined payout ratio (dividends + stock buybacks) of 100+

% in 2026.

Downside scenario • Right to Remain Independent: On its 4Q25 earnings call,

Our downside scenario of $139 assumes inflation is persistent senior management continues to express their intent to

and far exceeds the Federal Reserve’s 2.0% target throughout remain independent and has not engaged in merger &

the next 12 months, forcing the Federal Reserve to pivot and acquisition discussions to be acquired. Delivering continued

start raising the Federal Funds rate, resulting in a recession in strong financial performance will give NTRS the right to

2027, which lowers earnings and profitability. remain independent. NTRS has medium-term, 3–5 years,

profitability targets of an ROE (return on equity) in the mid-

teens and a pre-tax margin of 33% from 13-15% and 30%+,