Northern Trust Corp (NTRS)

Market price: $171.90

5 valuation methods

How each method works

Dividend Discount Model (DDM): $74.78 to $123.00 (midpoint $93.23)

Values the stock as the present value of its expected dividend stream — fitting for stable, dividend-anchored payers like banks, insurers, and utilities.

How it’s calculated
We take the company's dividend and grow it in three stages: three years at the rate its own retained earnings can support (the share of profit it keeps, multiplied by the return it earns on equity), then a seven-year glide down to a long-run rate, and that rate for ever after. The whole stream is discounted back to today at the company's cost of equity. The range comes from flexing that cost of equity.
Why it fits this industry
Bank dividends are set as a deliberate share of through-cycle earnings, so the dividend stream — built here from the payout ratio applied to normalized earnings — is a natural measure of what ownership returns.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. This bar values only the cash actually paid out. A company that keeps most of its profit is building value the dividend stream does not capture, so its DDM bar tends to sit below the price — the pattern is strongest where the payout ratio is lowest. It is one anchor among several, and for a low payer the earnings-based bars carry more of the story. The long-run rate is the same one the discounted-cash-flow bar uses, so the two do not assume different futures for the same company.

DDM: D₀ 2.37 grown at 12.30% a year for 3y, then eased to 2.50% over 7y and held there, discounted at Ke 6.80%±1.00% => per-share 74.78/93.23/123.00

P / B: $78.75 to $121.32 (midpoint $95.12)

Values the stock at a peer multiple of its book (net asset) value — most meaningful for asset-heavy and financial companies whose balance sheet drives value.

How it’s calculated
We take book value per share (total assets minus total liabilities, from the latest balance sheet, divided by shares outstanding) and multiply it by the range of price-to-book multiples the peer group trades at.
Why it fits this industry
A bank's assets and liabilities are mostly financial instruments carried near market value, so book value is a genuinely meaningful measure of what shareholders own.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. Asset-light companies (brands, software) legitimately trade far above book value, so for them a P/B bar well below the price is usually structure, not signal.

P / B = (1.08/1.30/1.66)× book_value_per_share 73.25 ≈ 78.75/95.12/121.32 (per_share)

P / Tangible Book: $99.08 to $148.04 (midpoint $124.37)

Values a bank at a peer multiple of tangible book value (book equity less goodwill/intangibles) — the cleanest asset base for comparing banks.

How it’s calculated
We start from book value, remove goodwill and other intangible assets to get tangible book value per share, and apply the range of price-to-tangible-book multiples comparable banks trade at.
Why it fits this industry
Tangible book is the hardest measure of a bank's equity — what remains after acquisition goodwill is set aside — and is the banking sector's standard basis for comparing lenders.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. Banks earning higher returns on their equity deservedly trade at richer multiples of tangible book, so position within the range matters.

P / Tangible Book = (1.43/1.79/2.13)× tangible_book_per_share 69.37 ≈ 99.08/124.37/148.04 (per_share)

P / E — normalized: $121.66 to $197.55 (midpoint $147.35)

Like P/E but on earnings averaged over several years, smoothing the credit/business cycle so a single strong or weak year doesn't distort the picture (a bank flagship).

How it’s calculated
Instead of a single year, we average earnings per share over the last three years and apply the peer P/E range to that normalized figure — smoothing one-off strong or weak years.
Why it fits this industry
Profits in cyclical lending swing with the credit cycle as loan-loss provisions rise and fall; a multi-year average shows the earning power of the franchise through the cycle rather than at one point in it.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. If recent years were unusually good or bad across the whole cycle, even the average can lean one way — compare it with the single-year P/E bar.

P / E — normalized = (13.70/16.59/22.24)× normalized_eps 8.88 ≈ 121.66/147.35/197.55 (per_share)

P / E: $130.77 to $178.99 (midpoint $148.31)

Values the stock at a peer multiple of its earnings per share — the most familiar gauge for steadily profitable companies.

How it’s calculated
We take the company's net earnings per share over the last twelve months and multiply them by the range of price-to-earnings (P/E) multiples its peers trade at.
Why it fits this industry
For steadily profitable companies, earnings are the bottom line an owner is entitled to — P/E is the most familiar way to ask what the market pays for a dollar of profit.
Reading this bar
The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. One unusually strong or weak year can swing a P/E — the inputs panel shows the earnings the bar is built on.

P / E = (10.67/12.11/14.61)× eps 12.25 ≈ 130.77/148.31/178.99 (per_share)

4 methods not shown