The PNC Financial Services Group, Inc.
) achieved a new 52-week high, touching $77.93 on Aug 2, 2013.
The closing price of this major regional bank reflects a robust
year-to-date return of 32.5%. The trading volume for the session
was 2.7 million shares.
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Despite the strong price appreciation, this Zacks Rank #2 (Buy)
stock has plenty of upside left due to its expected long-term
earnings growth rate of 4.7%.
Impressive second-quarter 2013 results, a strong capital position
and healthy capital deployment activities were the company's
primary growth drivers.
PNC Financial's second-quarter earnings beat the Zacks Consensus
Estimate by 21%. The results benefited from reduced expenses and
growth in non-interest income, partly offset by a fall in net
interest income. Further, enhanced credit quality was a positive.
Further, over the years, PNC Financial's capital deployment
initiatives through dividend payments and share buybacks boosted
the confidence of yield seeking investors. Since 2011, the
company has hiked its dividend every year. Moreover,
opportunistic acquisitions such as that of the Flagstar Bank and
the U.S. banking operations of
Royal Bank of Canada
) will likely enhance the stock's value further.
We believe that PNC Financial is well poised for growth, given
its diverse revenue mix, efforts to strengthen the balance sheet,
improving credit quality, strategic acquisitions and steady
capital levels. However, a protracted economic recovery,
persistent low interest-rate environment and increased regulatory
headwinds are likely to limit profitability.
For 2013, the Zacks Consensus Estimate moved north by 5% to $7.02
per share over the last 30 days. For 2014, the Zacks Consensus
Estimate inched up 1% to $6.95 per share over the same time
Other better performing banks include
Wells Fargo & Company
), both of which carry a Zacks Rank #2 (Buy).