Morgan Stanley Maintains Underweight on Northern Trust Corp, Raises PT to $66.00 from $63.00

In a report published Thursday, Morgan Stanley analyst Besty Graseck maintained Underweight on Northern Trust Corporation

, raising its price target to $66.00 from $63.00. According to the report, price target up 5 percent on expectations that management can deliver 270bp positive operating leverage. The analysts model 9 percent core fee growth in 2014 on 12percent/11percent average AUM/AUC growth. “NIM was down 2bp q/q to 1.12% on a shift in mix into Fed reserves due accelerating deposit growth,” the report noted. “Total EOP interest bearing deposits increased 7.5% q/q, a $5B influx, which was largely invested in Fed deposits yielding 25bp. We expect half of these deposits are sticky and model a positive mix shift to higher yielding securities from Fed reserves. We model NIM increasing from 1.13% in 2013 to 1.15% in 2014 and 1.18% in 2015.” Some highlights from the report included: -Boosting 2014's capital return to 93 percent as mgmt intends to fully execute on its 2013 CCAR approval -Underweight on valuation NTRS closed Wednesday at $62.38.