The PNC Financial Services Group, Inc. (PNC) | Investment Case

1. Company Snapshot

1.a. Company Description

The PNC Financial Services Group, Inc.operates as a diversified financial services company in the United States.The company's Retail Banking segment offers checking, savings, and money market accounts, as well as certificates of deposit; residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans, and personal and small business loans and lines of credit; and brokerage, insurance, and investment and cash management services.

This segment serves consumer and small business customers through a network of branches, ATMs, call centers, and online and mobile banking channels.Its Corporate & Institutional Banking segment provides secured and unsecured loans, letters of credit, and equipment leases; cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services, and access to online/mobile information management and reporting; foreign exchange, derivatives, fixed income, securities underwriting, loan syndications, and mergers and acquisitions and equity capital markets advisory related services; and commercial loan servicing and technology solutions.It serves mid-sized and large corporations, and government and not-for-profit entities.

The company's Asset Management Group segment offers investment and retirement planning, customized investment management, credit and cash management solutions, and trust management and administration services for high net worth and ultra high net worth individuals, and their families; and multi-generational family planning services for ultra high net worth individuals and their families.It also provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services for institutional clients.The company has 2,591 branches and 9,502 ATMs. The company was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on PNC

The recent performance of The PNC Financial Services Group, Inc. has been driven by several positive factors. The company's first-quarter 2025 earnings report showed a rise in net interest income and fee income, despite increased expenses. PNC's geographic and business diversification is a significant strength, allowing it to navigate the current market conditions more effectively than its peers. The company's efforts to enhance its non-interest revenue sources, such as through new branches and acquisitions, are also contributing to its growth prospects. Additionally, PNC's announcement of a stress capital buffer and planned capital actions demonstrate its commitment to maintaining a strong capital position. Furthermore, the company's recent investment in affordable housing through its multifamily capital arm is a positive development, as it increases access to affordable housing across the US.

1.c. Company Highlights

Last Price	198.27
Change Percentage	0.14%
Open	197.92
Previous Close	198
Market Cap ( Millions)	77753
Volume	1939331
Year High	209.86
Year Low	145.12
M A 50	188.13
M A 200	183.74

FCF Yield	6.98%
Dividend Yield	3.33%
ROE	11.48%
Debt / Equity	105.69%
Net Debt / EBIDTA	282.26%
Price To Book	1.33
Price Earnings Ratio	12.03
Price To FCF	14.33
Price To sales	2.3
EV / EBITDA	12.17

2. PNC Financial's Impressive Q3 Earnings Beat Expectations

PNC Financial Services Group, Inc. reported a net income of $1.8 billion or $4.35 per share for the third quarter, surpassing analyst estimates of $4.05 per share. The company's results reflect an impressive performance across the entire franchise, with growth in customers, loans, and deposits. Net interest income (NII) growth continued as expected, coupled with strong fee growth and well-controlled expenses. The net charge-off ratio remained strong at 22 basis points.

Publication Date: Oct -16

                                    📋 Highlights
                                    Net Income & EPS Growth::
                                                PNC reported Q3 net income of $1.8 billion ($4.35/share), reflecting strong performance across all business lines.
Loan & Deposit Growth::
                                                Average loans rose 1% to $326 billion, and deposits increased 2% to $432 billion, driven by customer acquisition and rate sensitivity.
Capital Returns::
                                                $1 billion returned to shareholders via $679 million in dividends and $331 million in buybacks, with Q4 buybacks projected at $300–400 million.
NII Growth Projections::
                                                2025 net interest income expected to grow 6.5%, with over $1 billion growth anticipated in 2026 post-rate cuts and loan stabilization.
Market Share Expansion::
                                                Acquisition of FirstBank positions PNC as Denver’s top retail deposit and branch market share leader, with 25+ new branches planned by year-end.

                                

Balance Sheet Strength

The company's balance sheet showed average loans of $326 billion, up $3 billion or 1% from the linked quarter, and average deposits of $432 billion, up $9 billion or 2%. The tangible book value of $107.84 per common share increased 4% linked quarter and 11% compared to the same period a year ago. This growth in deposits and loans is a testament to PNC's ability to attract and retain customers.

Capital Return and Future Expectations

During the quarter, PNC returned $1 billion of capital to shareholders, including $679 million in common dividends and $331 million of share repurchases. The company expects fourth-quarter share repurchases to continue to be in the range of $300 million to $400 million. PNC expects real GDP growth to be below 2% in 2025 and unemployment to peak above 4.5% in mid-2026, anticipating the Fed to cut rates three consecutive times.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.22, PNC's valuation appears reasonable. The Dividend Yield stands at 3.62%, indicating an attractive return for income-seeking investors. Analysts estimate next year's revenue growth at 7.6%, which is a positive indicator for the company's future performance.

Acquisition and Growth Strategy

The acquisition of FirstBank will propel PNC to the number one market share position in retail deposits and branches in Denver. PNC will open more than 25 new branches by the end of the year and remains on track to complete its 200-plus branch builds by 2029. The company's focus on organic growth, coupled with strategic acquisitions, is expected to drive future growth.

Earnings Guidance and Outlook

PNC expects net interest income (NII) growth of 6.5% for 2025 and anticipates a higher growth trajectory in 2026, with expectations of comfortably over $1 billion in NII growth. The company's CET1 capital ratio is 10.6% on an AOCI-adjusted basis, and management considers it to be at the high end of its operating guideline of 10% to 10.5%. This strong capital position provides a foundation for future growth and returns to shareholders.

3. NewsRoom

17 dividend-stock bargains from a value manager with a stellar track record

Dec -02

Source: marketwatch.com

Citigroup vs. PNC Financial: Which Stock Has a Bigger Upside?

Nov -27

Source: zacks.com

The PNC Financial Services Group, Inc (PNC) Recently Broke Out Above the 50-Day Moving Average

Nov -26

Source: zacks.com

Fed will lean dovish in 2026, says PNC's Yung-Yu Ma

Nov -25

Source: youtube.com

PNC Executives to Speak at Goldman Sachs Financial Services Conference

Nov -25

Source: prnewswire.com

PNC's 2025 Christmas Price Index®: Holiday Cheer Comes at a Premium!

Nov -24

Source: prnewswire.com

Bahl & Gaynor Inc. Sells 101,784 Shares of The PNC Financial Services Group, Inc $PNC

Nov -22

Source: defenseworld.net

AGP Franklin LLC Purchases Shares of 1,216 The PNC Financial Services Group, Inc $PNC

Nov -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Retail Banking Incl. Residential Mortgage

Expected Growth: 5.0%

The retail banking segment is expected to grow at a slightly lower rate than the global growth hypothesis due to intense competition in the consumer banking space and potential regulatory changes that may impact revenue. However, PNC's strong brand and diversified revenue streams will help mitigate these risks.

Corporate & Institutional Banking

Expected Growth: 6.0%

The corporate and institutional banking segment is expected to grow at a higher rate than the global growth hypothesis due to the increasing demand for corporate financing and treasury management services. PNC's strong relationships with corporate clients and its expertise in capital markets will drive growth in this segment.

Asset Management Group

Expected Growth: 5.5%

The asset management group segment is expected to grow in line with the global growth hypothesis due to the steady demand for investment and wealth management services. PNC's strong brand and expertise in asset management will help drive growth in this segment.

Other

Expected Growth: 5.5%

The 'Other' segment is expected to grow in line with the global growth hypothesis, as it is not a core driver of PNC's revenue. The segment's growth will be driven by various miscellaneous activities, which are expected to be relatively stable.

7. Detailed Products

Retail Banking

Provides personal banking services, including checking and savings accounts, credit cards, loans, and investment services

Corporate Banking

Offers cash management, lending, and treasury management services to large corporations and middle-market companies

Wealth Management

Provides investment, trust, and estate services to individuals, families, and institutions

Asset Management

Offers investment management services to institutional clients, including pension funds, endowments, and foundations

Residential Mortgage Banking

Provides mortgage lending services to individuals and families

Commercial Mortgage Banking

Offers commercial mortgage lending services to real estate investors and developers

Treasury Management

Provides cash management and treasury services to corporations and government entities

Harris Williams & Co.

Provides M&A advisory services to middle-market companies

8. The PNC Financial Services Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PNC Financial Services Group, Inc. is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low for PNC Financial Services Group, Inc. as customers have limited negotiating power due to the complexity of financial products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for PNC Financial Services Group, Inc. as the company relies on various suppliers for technology, infrastructure, and services.

Threat Of New Entrants

The threat of new entrants is low for PNC Financial Services Group, Inc. due to the high barriers to entry in the financial services industry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for PNC Financial Services Group, Inc. due to the presence of several large and established financial institutions in the market, leading to intense competition.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	65.97%
Debt Cost	9.69%
Equity Weight	34.03%
Equity Cost	9.69%
WACC	9.69%
Leverage	193.83%

11. Quality Control: The PNC Financial Services Group, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Preferred Bank

A-Score: 7.1/10

Value: 7.0

Growth: 8.1

Quality: 7.4

Yield: 6.0

Momentum: 6.5

Volatility: 7.7

1-Year Total Return ->

OpenBank

A-Score: 7.0/10

Value: 7.7

Growth: 6.9

Quality: 6.7

Yield: 8.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

PNC Financial Services Group

A-Score: 6.9/10

Value: 5.8

Growth: 6.0

Quality: 6.6

Yield: 8.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

M&T Bank

A-Score: 6.6/10

Value: 6.6

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

First Citizens BancShares

A-Score: 4.9/10

Value: 6.1

Growth: 9.8

Quality: 4.9

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

1.81%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.69%

The PNC Financial Services Group, Inc. - US6934751057

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PNC

1.c. Company Highlights

Average Yield

Stable Momentum

Average Growth

Earnings Beats

Revenues Beats

Medium Volatility

Average Quality

Revenues Miss

Fairly Valued

2. PNC Financial's Impressive Q3 Earnings Beat Expectations

Balance Sheet Strength

Capital Return and Future Expectations

Valuation and Dividend Yield

Acquisition and Growth Strategy

Earnings Guidance and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Retail Banking Incl. Residential Mortgage

Expected Growth: 5.0%

Corporate & Institutional Banking

Expected Growth: 6.0%

Asset Management Group

Expected Growth: 5.5%

Other

Expected Growth: 5.5%

7. Detailed Products

Retail Banking

Corporate Banking

Wealth Management

Asset Management

Residential Mortgage Banking

Commercial Mortgage Banking

Treasury Management

Harris Williams & Co.

8. The PNC Financial Services Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: The PNC Financial Services Group, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

198.27$

Current Price

198.27$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA