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PNC Financial (PNC)
NYSE:PNC
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PNC Financial
(NYSE:PNC)71Outperform
Positive Factors
Analyst Recommendation
Analyst recommends a buy rating with a price objective of $216, indicating confidence in the stock's potential to appreciate.
Financial Performance
PNC reported stronger revenue with 2025 guidance largely in-line with expectations.
Negative Factors
Credit Risk
Credit losses are expected to drift higher, with stress in the commercial real estate office portfolio, which could apply upward pressure to credit losses.
PNC Financial (PNC) vs. S&P 500 (SPY)
Market Cap
$75.95B
Dividend Yield3.31%
Average Volume (3M)2.03M
Price to Earnings (P/E)14.0
Beta (1Y)1.11
Revenue Growth7.24%
EPS Growth7.51%
CountryUS
Employees56,411
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)13.75
Shares Outstanding395,749,570
10 Day Avg. Volume1,842,477
30 Day Avg. Volume2,027,211
Financial Highlights & Ratios
PEG Ratio1.86
Price to Book (P/B)N/A
Price to Sales (P/S)3.52
Price to Cash Flow (P/CF)10.60
P/FCF Ratio4.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$220.59Price Target Upside22.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
PNC Financial Business Overview & Revenue Model
Company DescriptionPNC Financial Services Group, Inc. (PNC) is a diversified financial services company headquartered in Pittsburgh, Pennsylvania. It operates across various sectors, including retail banking, corporate and institutional banking, asset management, and residential mortgage banking. The company offers a wide range of services such as checking and savings accounts, personal and business loans, credit cards, wealth management, and investment services. PNC serves a broad customer base, including individuals, small businesses, corporations, and government entities.
How the Company Makes MoneyPNC Financial makes money primarily through interest income, non-interest income, and fees. Interest income is generated from loans issued to consumers and businesses, including mortgages, credit cards, and commercial loans. Non-interest income comes from various services such as asset management, investment banking, and brokerage services. Fee income is derived from account maintenance fees, transaction fees, and service charges. PNC also benefits from strategic partnerships and acquisitions that expand its customer base and enhance service offerings. The company invests in technology and digital platforms to improve customer experience and operational efficiency, further contributing to its revenue streams.
PNC Financial Financial Statement Overview
Summary
PNC Financial shows strong profitability and a robust balance sheet with efficient cost management. However, the decline in net income and cash flow concerns due to a lack of operating cash flow in the latest period pose challenges.Income Statement
PNC Financial has shown stable revenue generation with a moderate revenue growth rate of 3.87% in the most recent year. The gross profit margin and net profit margin stand strong at 100% and 28.36% respectively, reflecting efficient cost management. However, the slight decline in net income from the previous year indicates potential challenges in maintaining profit levels.78
Positive
Balance Sheet
The company's balance sheet is robust with a debt-to-equity ratio of 1.13, indicating a balanced approach to leverage. The equity ratio of 9.72% suggests a solid capital base, although there is room for improvement. The return on equity is impressive at 10.82%, highlighting effective use of shareholder funds.82
Very Positive
Cash Flow
PNC Financial's cash flow position appears constrained with a significant drop in free cash flow and a lack of clear growth trajectory. The absence of operating cash flow in the latest period raises concerns about operational efficiency and cash generation capabilities.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 20.77B | 21.51B | 21.11B | 19.21B | 16.90B | Gross Profit |
| 20.77B | 21.51B | 21.11B | 19.21B | 16.90B | EBIT |
| 7.24B | 6.74B | 10.66B | 10.18B | 5.82B | EBITDA |
| 75.54B | 6.95B | 8.12B | 8.76B | 4.93B | Net Income Common Stockholders |
| 5.89B | 5.58B | 6.04B | 5.67B | 7.52B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.90B | 61.46B | 78.52B | 213.79B | 179.55B | Total Assets |
| 560.04B | 561.58B | 557.26B | 558.45B | 466.68B | Total Debt |
| 61.67B | 72.74B | 58.71B | 33.00B | 39.29B | Net Debt |
| 54.77B | 22.01B | 24.35B | -49.25B | -52.90B | Total Liabilities |
| 505.57B | 510.44B | 511.45B | 30.78B | 37.20B | Stockholders Equity |
| 54.42B | 51.10B | 45.77B | 55.70B | 54.01B |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 10.11B | 9.08B | 7.21B | 4.66B | Operating Cash Flow |
| 0.00 | 10.11B | 9.08B | 7.21B | 4.66B | Investing Cash Flow |
| 0.00 | -6.38B | -13.43B | -2.79B | -51.12B | Financing Cash Flow |
| -9.12B | -3.85B | 3.38B | -3.43B | 48.42B |
PNC Financial Technical Analysis
Negative
180.45
Price Trends
194.33
Negative
195.70
Negative
180.74
Negative
Market Momentum
-3.09
Positive
31.15
Neutral
36.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNC, the sentiment is Negative. The current price of 180.45 is below the 20-day moving average (MA) of 193.20, below the 50-day MA of 194.33, and below the 200-day MA of 180.74, indicating a bearish trend. The MACD of -3.09 indicates Positive momentum. The RSI at 31.15 is Neutral, neither overbought nor oversold. The STOCH value of 36.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PNC.
PNC Financial Risk Analysis
PNC Financial disclosed 29 risk factors in its most recent earnings report. PNC Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PNC Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $257.53B | 14.60 | 11.01% | 2.01% | 7.87% | 11.69% | |
73 Outperform | $150.66B | 13.45 | 6.08% | 2.86% | 8.20% | 49.26% | |
72 Outperform | $350.58B | 14.34 | 9.18% | 2.19% | 13.06% | 4.94% | |
71 Outperform | $75.95B | 13.97 | 10.82% | 3.31% | 7.24% | 7.51% | |
70 Neutral | $73.16B | 12.39 | 10.75% | 4.22% | 5.59% | 15.52% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
57 Neutral | $60.50B | 13.81 | 7.57% | 4.49% | -26.77% | ― |
* Financial Sector Average
Performance Comparison
PNC
PNC Financial
180.45
30.85
20.62%
BAC
Bank of America
42.67
7.92
22.79%
TFC
Truist Financial
43.76
8.44
23.90%
C
Citigroup
72.35
17.97
33.05%
USB
US Bancorp
44.61
3.27
7.91%
WFC
Wells Fargo
73.30
18.04
32.65%
PNC Financial Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: -9.97% | Next Earnings Date: Apr 15, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance for PNC in 2024 with record revenue, positive operating leverage, and successful expansion in new markets. However, there were challenges in loan demand and the CRE office portfolio, alongside a decline in mortgage revenue and negative AOCI impact due to higher rates.Highlights
Strong Financial Performance in 2024
PNC reported a solid fourth quarter and a very strong year with $6 billion earnings or $13.74 per share, achieving record revenue and maintaining expense discipline.
Record Revenue and Positive Operating Leverage
PNC generated record revenue of $21.6 billion for the full year 2024 with a 6% increase in fee income, resulting in positive operating leverage.
Expansion Markets Success
Sales in expansion markets grew 26% with over 60% of those sales being noncredit, indicating strong growth in new client acquisition.
Retail Banking and Asset Management Growth
Consumer DDA growth in 2024 was the highest in 8 years with record brokerage revenue at PNC investments and strong positive net flows in asset management.
Capital and Shareholder Returns
Increased tangible book value per share by 12% and returned $3 billion of capital to shareholders through dividends and share buybacks.
Lowlights
Loan Growth Challenges
Loan demand remained soft throughout the year and average loan balances were stable compared to the third quarter, with no significant growth anticipated in guidance.
Negative AOCI Impact
AOCI was negative $6.6 billion compared to negative $5.1 billion as of September 30, reflecting the impact of higher rates.
CRE Office Portfolio Stress
Continued stress in the office CRE portfolio with reserves increasing to 13% and expected additional charge-offs.
Mortgage Revenue Decline
Mortgage revenue declined $59 million compared to the third quarter, primarily due to elevated RMSR hedge gains in the previous quarter.
Company Guidance
During the PNC Financial Services Group's Q4 2024 earnings call, the company provided forward guidance for 2025, highlighting several key metrics. PNC expects net interest income (NII) to grow by 6% to 7%, driven by continued fixed-rate asset repricing and stable loan growth assumptions. Fee income is anticipated to increase by approximately 5%, supported by mid to high single-digit growth in areas such as asset management, capital markets, and card and treasury management. Despite uncertainties, PNC aims for a 1% increase in noninterest expenses, reflecting ongoing investments in business and technology. The company projects substantial positive operating leverage for the year, with a focus on maintaining strong capital levels and a CET1 ratio of 10.5% as of December 31. PNC's guidance also incorporates expectations of two Federal Reserve rate cuts in 2025.PNC Financial Corporate Events
Executive/Board Changes
PNC Financial Enhances Executive Compensation Plan
Neutral
Feb 21, 2025
On February 14, 2025, PNC Financial’s Human Resources Committee approved modifications to the restricted and performance share unit awards for certain officers under the 2016 Incentive Award Plan. These changes ensure that, upon a qualifying termination without cause or for good reason, the awards will continue to vest and be paid out as if the officer remained employed throughout the performance or service period, potentially enhancing job security and aligning executive interests with long-term company performance.
Executive/Board Changes
PNC Financial Appoints Douglas Dachille to Board
Neutral
Feb 3, 2025
On January 31, 2025, PNC Financial Services Group’s Board of Directors expanded to 13 members and appointed Douglas Dachille to the Board, effective February 3, 2025. Dachille, considered independent by NYSE standards, will join the Risk Committee and PNC Bank’s Board, aligning with PNC’s governance practices.
Executive/Board Changes
PNC Financial President Michael P. Lyons Resigns
Neutral
Jan 23, 2025
On January 23, 2025, PNC Financial Services announced the resignation of its President, Michael P. Lyons, who has been with the company since 2011 and was named president in 2024. Lyons is leaving to take on the role of President & CEO-Elect at Fiserv. PNC’s Chairman and CEO, William S. Demchak, acknowledged Lyons’s contributions to the company’s growth and expressed confidence in the existing leadership team to continue the bank’s trajectory towards becoming one of the largest and most successful banks in the country.
Financial Disclosures
PNC Financial Reports Record Revenue and Strong Performance
Positive
Jan 16, 2025
On January 16, 2025, PNC Financial Services Group reported its financial performance for the fourth quarter and full year of 2024. PNC achieved record revenue with strong credit quality, growing net income to $6.0 billion, and increasing capital position. Despite challenges, the company maintained stable loan balances and deposits, demonstrating effective management of interest rate sensitivity and operating leverage.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.