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Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: Dr_of_Microcaps who wrote (208580)	1/26/2012 10:47:50 AM
From: Brasco One	Read Replies (1) \| Respond to of 208838

Current Environment Challenging; Performance Initiative Plan a Plus ?? Revenue growth challenging in current environment As reflected in NTRS and the overall trust bank results in Q411, the current operating environment is challenging and will continue in 2012. The company outlined initiatives to increase revenues and reduce expenses through 2013 which we view as a positive, but earnings should remain challenged until there is market and rate improvement. ?? NTRS details performance improvement initiative to bolster margin, ROE In line with peers BK and STT, NTRS has announced plans to undertake a business optimization plan with a goal of annualized pre-tax benefits of $250 mln by the end of 2013, with at least 50% of this realized in 2012. Estimated impact of full $250 mln includes 5-6 percentage point improvement to margin and +2 percentage points to ROE. Plans include expense reductions of $175 mln and revenue enhancement of $75 mln, and the company is targeting a 10%-15% long-term ROE. ?? Assets under Management and Assets under Custody grow in 4Q11 Despite the uneven markets in 4Q11, both assets under custody and asset under management grew in 4Q11. On a q/q basis, AUC balances were up 2% and AUM balances were up 3%. ?? Valuation: Raising our TP to $43 and Neutral rating on NTRS NTRS is trading at a P/E of 15.6x, a 13% discount to its 10-yr avg. Our $43 PT translates to 12.8x our 2013 EPS, fair value in light of current market conditions.