Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vivek Kumar
E-mini NASDAQ-199 Index

PNC Financial Services Group Inc, an American bank holding company and financial services corporation, said its profit rose in the third quarter, largely driven by a lower provision for credit losses and higher noninterest income.

The company said its net income from continuing operations was $1.5 billion, an increase of $2.3 billion driven by a lower provision for credit losses and higher noninterest income. Total revenue increased 5% to $4.3 billion, an increase of $205 million.

“Expenses were well-controlled again in 3Q, a story that looks to continue. With its substantial excess capital position, PNC is expected to take advantage of opportunities to add to its franchise, but time will tell what might come available. We raise our ’21 EPS est. to $8.25 (from $7.15) but ’22 moves to $9.75 (from $10.45), mostly on charge-off/provision timing but with higher PPNR,” said Ken Usdin, equity analyst at Jefferies.

The diversified financial services organization reported a net interest income of $2.5 billion decreased $43 million, or 2%, as lower yields on loans and securities and a decline in loan balances more than offset the benefit of lower rates on deposits and borrowings.

PNC Financial reported that its net interest margin decreased 13 basis points to 2.39% reflecting the impact of higher balances held with the Federal Reserve Bank and lower yields on loans and securities partially offset by lower rates on deposits and borrowings.

At the time of writing, PNC Financial shares traded 0.30% higher at $109.01 on Thursday; however, the stock is down about 30% so far this year.

Executive comments

“PNC delivered solid third-quarter results against the backdrop of a continuing uncertain economy. Noninterest income increased, expenses were well managed, and we continued to generate positive operating leverage. Deposits grew while loans declined as a result of lower commercial loan utilization rates, despite growth in loan commitments,” said Bill Demchak, PNC Chairman, President and Chief Executive Officer.

“Our provision for credit losses was significantly less than last quarter, reflecting stable reserve levels. We continue to execute on our strategic priorities, including ongoing investments in our national expansion and digital offerings. We have substantial capital and liquidity flexibility and remain well-positioned to take advantage of potential investment opportunities to enhance shareholder value.”


PNC Financial stock forecast

Twelve analysts forecast the average price in 12 months at $117.64 with a high forecast of $138.00 and a low forecast of $83.00. The average price target represents a 7.95% increase from the last price of $108.98. From those 12 equity analysts, five rated “Buy”, five rated “Hold” and two rated “Sell”, according to Tipranks.

Morgan Stanley target price is $109 with a high of $154 under a bull scenario and $79 under the worst-case scenario. PNC Financial Services Group had its price objective raised by equities researchers at Credit Suisse Group to $117 from $115. The brokerage currently has a “neutral” rating on the financial services provider’s stock.

Several other analysts have also recently commented on the stock. Keefe, Bruyette & Woods cut shares of PNC Financial Services Group to a “market perform” rating from an “outperform” rating and decreased their price target to $127 from $130. Oppenheimer reissued a “hold” rating. JP Morgan Chase & Co. raised their price objective to $120 from $110 and gave the company an “overweight” rating. Zacks Investment Research cut shares from a “hold” rating to a “sell” rating and set a $118 price objective on the stock.

Analyst Comments

“PNC generated $6B in capital from sale of BLK stake. What’s next? Bank M&A is now a key debate for the stock, especially as excess capital and liquidity pressures returns near term. We stay on the sideline as shares already largely reflect the value creation we believe an accretive deal could deliver. PNC going national with multiple initiatives. Middle market C&I expansion well underway, includes 8 new markets in 2017-2019 and 2 additional markets in 2020,” said Betsy Graseck, equity analyst at Morgan Stanley.

“Funded by national retail digital strategy. M&A could accelerate this growth. Excess capital provides valuable hedge, giving PNC optionality regardless of the economic environment,” Graseck added.

Upside and Downside Risks

Upside: 1) Accretive acquisition completed sooner than anticipated. 2) Economic growth rebounds in 2H20. 3) Long end rates rise faster than expected. 4) Lower than expected credit losses – highlighted Morgan Stanley.

Downside: 1) PNC sits on excess capital for longer than expected. 2) Macro environment remains challenging through 2021. 3) Higher than expected credit deterioration. 4) 10-year yield below expectations. 5) Loan growth decelerates.

Check out FX Empire’s earnings calendar

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.