Pennsylvania-based financial services provider PNC Financial (PNC) reported better-than-expected financial results for the second quarter. The company offers information processing, loan servicing, estate planning, wealth management and asset management services.
Adjusted earnings per share (EPS) stood at $4.50, beating the Street’s estimates of $3.12. (See PNC stock chart on TipRanks)
Total revenue increased 11% year-over-year to $4.67 billion, surpassing analysts’ expectations of $4.39 billion. Net interest income grew 10% to $2.6 billion, and noninterest income rose 11% to $2.1 billion.
The company completed the acquisition of BBVA USA Bancshares on June 1, and expects to incur merger and integration-related costs of $980 million. Most of this cost will be incurred this year, with the conversion of systems, branches and customers likely to take place in October.
KBW analyst David Konrad recently initiated coverage on the stock with a Hold rating and a price target of $193 (3.2% upside potential).
In a research note to investors, the analyst said despite recent volatility and uncertainty regarding the macro reflation trade, he was constructive on large-cap banks due to expectations that the Federal Reserve would raise short-term rates.
Overall, the stock has a Moderate Buy consensus rating based on 9 Buys and 8 Holds. The average PNC Financial price target of $204.25 implies 9.2% upside potential. The company’s shares have gained 81% over the past year.
According to TipRanks’ Smart Score rating system, PNC scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.
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