PNC Financial Worth A Look For The Yield But It's Relatively Expensive
- PNC has held up during the recent selloff in financials and as a result, is more richly valued than many of its competitors.
- PNC is very well managed and a safe pick, which is likely why it hasn't sold off.
- The yield is decent and will be raised for the foreseeable future at mid- to high single-digit rates.
PNC Financial Running A More Cautious, Steady Long-Term Plan
- In a generally disappointing quarter so far for bank earnings, PNC reported a fairly good quarter, with better results in revenue and core expenses.
- PNC has not positioned its balance sheet to exploit a quick jump in rates, and near-term income growth is more tied to fee and loan growth and expense leverage.
- The company remains undervalued on the basis of a long-term ROE of 11.5%.
- Analysts have downgraded PNC on short-sighted claims about its recent performance.
- PNC is a financial powerhouse with a strong track record of outperformance and a dedication to shareholder return.
- When interest rates start to rise, PNC is in a perfect position to capitalize.
- The whisper number is $1.73, two cents ahead of the analysts' estimate.
- PNC has a 68% positive surprise history (having topped the whisper in 25 of the 37 earnings reports for which we have data).
- The overall average post earnings price move is 'as expected' (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.
PNC Financial Services Group: Opportunities And RisksStock Dmitry • Sep. 25, 2014
- PNC is showing strong positive aspects. The technological integration, rising interest rates and favorable valuation have all contributed to the company's growth.
- The company also faces a number of challenges. Both high non-performing assets level and under-leverage are stopping it from exploding up.
- The technical analysis does provide favorable opportunity for patient investors.
PNC Financial Services Is Doing Well But Has Limited Upside
- PNC is doing everything right within the constraints of the macroeconomy and current investors should be pleased.
- PNC is facing the headwind of margin compression which is about equal to the firm's growth in its loan book.
- In time, PNC should have more upside, but for now, the shares are fairly priced.
Whisper Number Impact: How Will PNC Financial's Stock Move After Earnings?WhisperNumber • Jul. 15, 2014
- The whisper number is $1.80, two cents ahead of the analysts' estimate.
- PNC has a 67% positive surprise history (having topped the whisper in 24 of the 36 earnings reports for which we have data).
- The overall average post earnings price move is "as expected" (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.
PNC Financial Looks Undervalued, With Quality To Spare
- PNC earns a better-than-average spread, with good credit quality and responsible leverage.
- Growing the mortgage business makes sense, but commercial lending will remain the biggest driver of the business.
- PNC doesn't seem undervalued relative to long-term profit growth in the neighborhood of 6%, but the company's current price/tangible book value does seem to undervalue the company's RoTE.
Strong Commercial Loan Growth At Major Regional Banks
- U.S. Bancorp and PNC Financial Services post strong commercial loan growth.
- Business demand for loans for capital expenditures seems to be picking up.
- Continuing earnings improvement and rising returns on equity.
PNC Bank Puts Money Back In Shareholders' Pockets In 2014
- In contrast with J.P. Morgan’s and Bank of America’s embarrassing Q1 results, PNC Financial Services reported growth.
- PNC is also set to increase quarterly dividends, and buy back $1.5 billion in stock.
- We recommend investors strongly consider investing in PNC over J.P. Morgan or Bank of America.
Is It Worth Adding PNC Financial To Your Portfolio?
PNC Financial: Performance Outweighs Marginal RisksRichard Tarjeft • May. 30, 2013
Sat, Jan. 24, 4:48 PM
- The financial sector is off to a worse start to the year than even the energy names, with the XLF down 3.9% YTD vs. the XLE's 3.2% decline. The S&P 500 is roughly flat. The SPDR KBW Bank ETF (NYSEARCA:KBE) is off 7.5%, and the Regional Bank ETF (NYSEARCA:KRE) is lower by 6.9%.
- Q4 earnings results haven't been wonderful, but financial names had been savaged well before those reports started coming out. Instead there's a difficult regulatory regime that won't quit, and - for now - it's looking like "wait'll next year" for the rising interest rates that were supposed to drive profit margins higher. The 10-year/2-year spread - already pretty low at 150 basis points to start the year - has narrowed to 137 bps.
- A partial roll call of banks: Bank of America (NYSE:BAC) -12.1% YTD, Citigroup (NYSE:C) -10.1%, JPMorgan (NYSE:JPM) -9.4%, Morgan Stanley (NYSE:MS) -9.4%, Regions Financial (NYSE:RF) -14.7%, KeyCorp (NYSE:KEY) -4.5%, PNC Financial (NYSE:PNC) -5.4%, Bank of New York (NYSE:BK) -9.1%, Capital One (NYSE:COF) -6%, Discover (NYSE:DFS) -13.6%.
- Other spread-starved sector names: MetLife (NYSE:MET) -9.8%, AIG (NYSE:AIG) -8%, Prudential (NYSE:PRU) -10.8%, Schwab (NYSE:SCHW) -9.9%.
- Some of what's working in financials: Blackstone (NYSE:BX) +6.7%, E*Trade (NASDAQ:ETFC) +1.2%, WisdomTree (NASDAQ:WETF) +12.3%, Legg Mason +2.8%.
Thu, Jan. 22, 12:35 PM
- Mercilessly sold since the year turned, banks are putting in a rare session of outperformance, helped along by some earnings beats from regional lenders and the return of animal spirits in M&A with RBC's purchase of City National (CYN +18.6%) for $5.4B.
- The XLF +1.4% vs. the S&P's 0.6% gain today, and the regional bank ETF (NYSEARCA:KRE) is higher by 3.1%.
- Among today's reporters putting in big gains are KeyCorp (KEY +5.5%), BB&T (BBT +2.4%), and Huntington Bancshares (HBAN +2.6%), though Flagstar Bancorp (FBC -4.8%) missed estimates.
- Others: Regions Financial (RF +3.9%), PNC Financial (PNC +1.6%), Synovus (SNV +3.2%), M&T Bank (MTB +3%), Hudson City (HCBK +3.1%), First Horizon (FHN +2.7%), and First Republic (FRC +4.9%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS
- Among the TBTFs, Citigroup (C +2.7%) and Bank of America (BAC +2.5%) are leading the way.
Fri, Jan. 16, 7:34 AM
- CEO William Demchak: "The near-term revenue environment remains challenging."
- Q4 net income of $1.1B or $1.84 per share vs. $1.1B and $1.87 one year ago.
- Net interest income of $2.097B down 7% Y/Y, with NIM of 2.89% down nine basis points from Q3 and down 49 bps from a year ago.
- Noninterest income of $1.85B up 2% Y/Y. Asset management income of $376M up 3%, Consumer Services $321M down 2%, Corporate Services $397M up 32%, Residential Mortgage $135M down 50%.
- Noninterest expense of $2.539B up 1% Y/Y.
- Total loans of $204.8B up 5% Y/Y; Investment securities of $55.8B down 7%. Deposits of $232.2B up 5%.
- Tier 1 capital ratio of 10% vs. 9.4% a year ago. 6.1M shares repurchased during Q for $500M. Company has another $400M to do this quarter to hits its Fed-approved buyback total.
- Book value per share of $77.61 up from $72.07 a year ago. TBVS of $59.88 up from $54.57.
- Conference call at 10 ET
- Previously: PNC Financial beats by $0.10, beats on revenue (Jan. 16)
- PNC unchanged premarket
Fri, Jan. 16, 6:56 AM
Thu, Jan. 15, 5:30 PM
Mon, Jan. 5, 1:25 PM
- "We view Wells Fargo (WFC -2.7%) as a core bank holding, but shares have reached our price target and we believe sentiment is now overwhelmingly positive after leading returns in 2014 (+21%, #1 among the top 50 banks)," says Baird's David George, who earlier downgraded the stock from Outperform to Neutral.
- Put the money in another bank? Not so quick, says George, suggesting the Fed could tighten later and be less aggressive than most expect, disappointing those hoping for higher rates to boost profits. Other than Wells Fargo, George sees sentiment highest in PNC Financial (PNC -2.7%), SunTrust (STI -3.9%), and U.S. Bancorp (USB -2.2%).
- Asset-sensitive names like Comerica (CMA -3.7%) and Zions (ZION -3.4%) lagged in 2014, but estimates still look to high.
- Top ideas would be Fifth Third (FITB -2.7%), Capital One (COF -2.4%), and JPMorgan (JPM -3%), but George is having a tough time finding value in the sector.
- Previously: Longtime Wells Fargo bull rings the register (Jan. 5)
Fri, Jan. 2, 10:52 AM
Dec. 8, 2014, 4:38 PM
- Senior Vice Chairman and Chief Risk Officer Joseph Guyaux has been appointed president and CEO of PNC Mortgage. He'll replace Todd Chamberlain, who's exiting effective January 31 for family reasons.
- Guyaux has been with PNC for 42 years.
- Taking Guyaux' spot as Chief Risk Officer for PNC is Joseph Rockey who currently leads Enterprise Risk Management and the Basel office within the bank's risk management organization.
- Source: Press Release
Oct. 27, 2014, 10:01 AM
- Spotting value in BB&T (BBT +0.2%), Sterne Agee ups the stock to a Buy with $43 price target. PNC Financial (PNC -0.3%) - on the other hand - loses its Buy rating, and is now a Neutral.
- Thus far this year, PNC is up 6.2%, outperforming BB&T by nearly 800 basis points. Meanwhile, BB&T continues to make acquisitions, the latest being another 41 Texas branches from Citibank, and The Bank of Kentucky.
Oct. 20, 2014, 12:54 PM
- "Credit leverage has mostly played out, VISA gains seem to be reflected in 2015 estimates (we assume $200M in our $7.39 estimate) and [the bank] has outperformed large regionals," says Matt O'Connor, downgrading PNC Financial (PNC -0.4%) to Hold as his Buy catalysts are about gone. The price target is cut to $87 from $94.
- He notes PNC has outperformed peers by 700 basis points YTD (and by 1.1K basis points vs. the five big asset-sensitive banks), making PNC the second-best performing name in his team's 29 regional bank coverage universe.
Oct. 15, 2014, 7:48 AM
- Q3 net income of $1B or $1.79 per share vs. $1B and $1.77 one year ago.
- Net interest income of $2.104B fell 6% from a year ago, with net interest margin of 2.98% down a whopping 49 basis points.
- Noninterest income of $1.737B up 3% from a year ago, with asset management revenue of $411M up 25%. Residential mortgage income of $140M fell 30%.
- Noninterest expense of $2.357B falls 2% from a year ago, with personnel expense of $1.189B up 1%.
- Tier 1 capital ratio of 10.1% up from 8.7% a year ago. 4.2M shares repurchased for $400M in Q3 vs. 2.6M for $200M in Q2. Buyback plan is for up to $1.5B ending in Q2 2015.
- Conference call at 10 ET
- Previously: PNC Financial beats by $0.08, beats on revenue
- PNC +1.7% premarket
Oct. 15, 2014, 6:45 AM
Oct. 14, 2014, 5:30 PM
Oct. 14, 2014, 3:31 PM
- Global growth, foreign-exchange, oil, and small caps are the subject of every client inquiry, says David Kostin. His team's recommendation: Buy "American exceptionalism."
- In Kostin's view, U.S. economy and corporate fundamentals are still strong, with economic growth expected by Goldman economists to be 3.2% next year, the fastest expansion since 2005. Europe is expected to grow just 1%.
- What his team likes are those stocks of companies which have a high proportion of domestic sales, plus sectors like Consumer Staples (XLP -0.1%) and Discretionary (XLY +0.7%) which stand to benefit from lower oil prices (plunging again today).
- As for small caps (IWM +0.9%), Kostin is wary, noting downward earnings revisions have boosted small cap P/E ratios even as prices have declined.
- The list of S&P 500 names capturing two or more of Kostin's themes: GT, GM, PCLN, AMZN, CMCSA, LOW, DG, TSN, ADM, CVS, AVP, WAG, PXD, HAL, JPM, BAC, SCHW, PNC, MS, C, GNW, LNC, MET, THC, AET, UNH, ESRX, HUM, WLP, BIIB, GILD, DAL, CMI, FLR, CRM, JBL, MA, FB, MU, FSLR, VMC, MON, T.
Oct. 2, 2014, 10:35 AM
- An outlier to the downside among Canadian lenders is Scotiabank (BNS -1.6%) as TD Securities pulls its Buy rating, the stock in the last two months giving up all and more of its gains this year.
- Another sizable bank downgraded today is PNC Financial (PNC -0.8%), with Jefferies citing valuation as it cuts to a Hold.
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
PNC vs. ETF Alternatives
PNC Financial Services Group Inc is a financial services company. It operates in six segments: Retail Banking; Corporate & Institutional Banking; Asset Management Group; Residential Mortgage Banking; BlackRock; and Non-Strategic Assets Portfolio.
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