PNC to Bump Dividend by 9%; Restart $2.9B Share Buyback

The PNC Financial Services Group (PNC) is planning to recommend a 9% increase in its Q3 dividend to $1.25 per share in accordance with the capital plan approved by its board. The board of directors is expected to meet on July 1.

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Furthermore, the company also plans to reinstate a $2.9 billion share repurchase program starting in Q3 with a term of four quarters. These repurchases are to be made under the 100 million share repurchase program approved by the board of directors in April 2019. (See PNC Financial stock chart on TipRanks)

The company also highlighted results from the Federal Reserve’s 2021 Comprehensive Capital Analysis and Review (CCAR), which demonstrated that PNC’s Common Equity Tier 1 (CET1) ratio exceeds the required minimum level, implying strong capital levels of the company.

This month, Evercore ISI analyst John Pancari initiated coverage on the stock with a Buy rating and a price target of $215 (12.2% upside potential).

Pancari sees the stock delivering better returns to investors than its peers. Despite sluggish loan growth in the industry, Pancari expects a moderate improvement in the company’s trajectory in H2 2021.

Based on 8 Buys and 9 Holds, consensus on the Street is a Moderate Buy. The average PNC Financial price target of $197 implies the stock is almost fully priced at current levels, with almost 3% upside potential over the next 12 months. Shares are up 86.3% over the past year.