On Jun 19, we issued an updated research report on The PNC Financial Services Group, Inc.PNC . The company's fee-income growth and cost saving initiatives to generate positive operating leverage are encouraging. However, low interest income and margin pressure remain major concerns.
PNC Financial's stock has gained 46.4% over the last one year outperforming the Zacks categorized Banks - Major Regional industry's rally of 38.1%.
The Zacks Consensus Estimate for the current year has been revised slightly upward over the last 30 days. The stock currently carries a Zacks Rank #3 (Hold).
The company's fee income witnessed a compound annual growth rate (CAGR) of 3.6% over the last five years (ending 2016). Per management, the execution of strategic initiatives is likely to result in mid-single digit growth in fee income in second-quarter 2017. Further, PNC Financial has diligently reduced expenses at a CAGR of 2.5% over the last five years (ended 2016) through various cost-control measures.
PNC Financial's strong capital position allows it to undertake impressive capital deployment activities. In Jan 2017, the company increased its share repurchase program by $300 million for the four-quarter period ending Jun 30, 2017, in addition to the share repurchase programs of $2 billion. Moreover, it hiked common stock dividend by 8% in Jun 2016.
Owing to the low interest rate environment for a long period, the company faced a decline in its net interest income at a five-year(2012-2016) CAGR of 3.4%. Also, net interest margin fell to 2.73% in 2016 from 3.94% in 2012. Despite the latest Fed rate hikes, we believe that the margin pressure would take some time to ease.
Stocks to Consider
Some stocks worth considering in the financial space include Comerica Incorporated CMA , M&T Bank Corporation MTB and Lakeland Bancorp, Inc. LBAI . All these stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Comerica has witnessed an upward earnings estimate revision of 8.8% for the current year in the past 60 days. Also, its shares have rallied 78.4% over the last one year.
M&T Bank's earnings estimates have been revised upward by 2.4% for the current year, in the past 60 days. Also, over the last one year, its shares have gained 40.8%.
Lakeland has witnessed an upward earnings estimate revision of 2.8% for the current year, in the past 60 days. Also, its shares have jumped 75.0%, over the last one year.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportPNC Financial Services Group, Inc. (The) (PNC): Free Stock Analysis ReportComerica Incorporated (CMA): Free Stock Analysis ReportM&T Bank Corporation (MTB): Free Stock Analysis ReportLakeland Bancorp, Inc. (LBAI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research