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PNC Financial Hits 52-Week High: Is the Stock Worth Investing?
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The PNC Financial Services Group, Inc. (PNC - Free Report) touched a new 52-week high of $183.34. The stock closed the trading session at $182.14, up 0.2% from the previous day’s closing price.
The PNC stock outperformed the industry, and its close peers — The Bank of New York Mellon (BK - Free Report) and U.S. Bancorp (USB - Free Report) in the past three months. BK rose 16.2% while USB increased 18.5% in the said time frame.
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Factors Leading to PNC Stock's New 52-Week High
A major factor for this upward movement of PNC stock can be attributed to Fed chairman Jerome Powell's statement. Per Powell, the central bank is ready to cut interest rates next month. At the Kansas City Fed's annual economic symposium in Jackson Hole on Monday, Powell stated, “The time has come for policy to adjust.”
With the series of economic data suggesting interest rate cuts are imminent, the clear signal from the Fed leadership had the stock markets soaring.
While the timing and pace of rate cuts will ‘depend on incoming data,’ market participants were quick to signal four rate cuts of 25 basis points each by 2024-end. Powell stated that the central bank has ‘ample room’ to maneuver as monetary policy enters its next phase without a high recession risk.
Such positive indicators reinforced investors' confidence in the banking sector and contributed to PNC stock touching a new 52-week high. Similar to other banks, PNC’s NII is impacted by the current high-interest rate regime as deposit costs surged. Its NII declined in the first half of 2024 due to higher funding costs. Management anticipates NII to inch up 1-2% in the third quarter of 2024 from $3.3 billion reported in second-quarter 2024. Also, the company expects to witness a record NII in 2025.
Also, PNC Financial’s impressive capital distribution plan stoke investors’ confidence in the stock. In July 2024, the company sequentially hiked quarterly cash dividends on common stock by 3.2% to $1.60 per share. Apart from regular dividend hikes, the company also has a share repurchase program in place. A 100 million share repurchase plan was authorized in the second quarter of 2022. As of Jun. 30, 2024, nearly 43% of shares were available for repurchase under the authorization. The company expects to maintain a similar level of share repurchase activities in the upcoming quarters of 2024. Given the company’s earnings and liquidity strength, its capital-distribution activities seem sustainable.
Does PNC Have More Room to Run?
PNC Financial remains committed to strengthening its business through strategic initiatives and acquisitions. In May, the bank extended its partnership with TCW Group to offer private credit solutions to middle-market companies. It aims to raise $2.5 billion in investor equity capital for investment in its first year. This partnership will allow the bank to gain a significant share of the expanding private credit market.
PNC Financial also announced plans to invest $1 billion to open more than 100 branches and renovate over 1,200 existing locations by 2028. With this, the bank is poised to improve its branch network and extend access to banking services for its customers and communities nationwide.
Such expansion moves will enable PNC Financial to bolster its presence in key locations, including Austin, Dallas, Denver, Houston, Miami, and San Antonio. With this, the bank will boost the reach of its coast-to-coast branch network.
With the addition of these new branches, PNC Financial will solidify its position as one of the largest retail banks in the United States.
Apart from new branch openings, it is also focusing on the renovation of its existing locations across the country, aiming to upgrade its customer experience. This will likely augment its retail banking business, which is a major revenue source for PNC Financial.
PNC Financial Estimate Revision
Analysts seem to be bullish about PNC Financial’s prospects. In the past month, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved upward. This upward adjustment reflects a positive sentiment among analysts and suggests encouraging prospects.
Image Source: Zacks Investment Research
Though PNC’s earnings are expected to decline 7% in 2024, it is expected to rebound and increase 10.8% in 2025.
Final Words on PNC Financial
PNC’s strategic plan to invest in new branches will expand its footprint into key markets, giving it an edge over its peers. Further, its rising deposit and decent loan balances will support its financials in the upcoming period.
Hence, PNC stock has decent growth prospects for the near future. It might have room left to run even higher. Investors must keep this Zacks Rank #3 (Hold) stock on their radar and wait for an attractive entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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PNC Financial Hits 52-Week High: Is the Stock Worth Investing?
The PNC Financial Services Group, Inc. (PNC - Free Report) touched a new 52-week high of $183.34. The stock closed the trading session at $182.14, up 0.2% from the previous day’s closing price.
The PNC stock outperformed the industry, and its close peers — The Bank of New York Mellon (BK - Free Report) and U.S. Bancorp (USB - Free Report) in the past three months. BK rose 16.2% while USB increased 18.5% in the said time frame.
Factors Leading to PNC Stock's New 52-Week High
A major factor for this upward movement of PNC stock can be attributed to Fed chairman Jerome Powell's statement. Per Powell, the central bank is ready to cut interest rates next month. At the Kansas City Fed's annual economic symposium in Jackson Hole on Monday, Powell stated, “The time has come for policy to adjust.”
With the series of economic data suggesting interest rate cuts are imminent, the clear signal from the Fed leadership had the stock markets soaring.
While the timing and pace of rate cuts will ‘depend on incoming data,’ market participants were quick to signal four rate cuts of 25 basis points each by 2024-end. Powell stated that the central bank has ‘ample room’ to maneuver as monetary policy enters its next phase without a high recession risk.
Such positive indicators reinforced investors' confidence in the banking sector and contributed to PNC stock touching a new 52-week high. Similar to other banks, PNC’s NII is impacted by the current high-interest rate regime as deposit costs surged. Its NII declined in the first half of 2024 due to higher funding costs. Management anticipates NII to inch up 1-2% in the third quarter of 2024 from $3.3 billion reported in second-quarter 2024. Also, the company expects to witness a record NII in 2025.
Also, PNC Financial’s impressive capital distribution plan stoke investors’ confidence in the stock. In July 2024, the company sequentially hiked quarterly cash dividends on common stock by 3.2% to $1.60 per share. Apart from regular dividend hikes, the company also has a share repurchase program in place. A 100 million share repurchase plan was authorized in the second quarter of 2022. As of Jun. 30, 2024, nearly 43% of shares were available for repurchase under the authorization. The company expects to maintain a similar level of share repurchase activities in the upcoming quarters of 2024. Given the company’s earnings and liquidity strength, its capital-distribution activities seem sustainable.
Does PNC Have More Room to Run?
PNC Financial remains committed to strengthening its business through strategic initiatives and acquisitions. In May, the bank extended its partnership with TCW Group to offer private credit solutions to middle-market companies. It aims to raise $2.5 billion in investor equity capital for investment in its first year. This partnership will allow the bank to gain a significant share of the expanding private credit market.
PNC Financial also announced plans to invest $1 billion to open more than 100 branches and renovate over 1,200 existing locations by 2028. With this, the bank is poised to improve its branch network and extend access to banking services for its customers and communities nationwide.
Such expansion moves will enable PNC Financial to bolster its presence in key locations, including Austin, Dallas, Denver, Houston, Miami, and San Antonio. With this, the bank will boost the reach of its coast-to-coast branch network.
With the addition of these new branches, PNC Financial will solidify its position as one of the largest retail banks in the United States.
Apart from new branch openings, it is also focusing on the renovation of its existing locations across the country, aiming to upgrade its customer experience. This will likely augment its retail banking business, which is a major revenue source for PNC Financial.
PNC Financial Estimate Revision
Analysts seem to be bullish about PNC Financial’s prospects. In the past month, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved upward. This upward adjustment reflects a positive sentiment among analysts and suggests encouraging prospects.
Though PNC’s earnings are expected to decline 7% in 2024, it is expected to rebound and increase 10.8% in 2025.
Final Words on PNC Financial
PNC’s strategic plan to invest in new branches will expand its footprint into key markets, giving it an edge over its peers. Further, its rising deposit and decent loan balances will support its financials in the upcoming period.
Hence, PNC stock has decent growth prospects for the near future. It might have room left to run even higher. Investors must keep this Zacks Rank #3 (Hold) stock on their radar and wait for an attractive entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.