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On Wednesday, Keefe, Bruyette & Woods made adjustments to its outlook on PNC Financial Services Group Inc. (NYSE: NYSE:PNC) shares, reducing the price target from the previous $195.00 to $185.00. The firm kept its Underperform rating on the stock. The revision follows PNC’s recent financial performance and market activities.
According to the research firm, PNC Financial’s recent earnings report presented a mixed outcome. While the company’s net interest income (NII) exceeded expectations by $0.05, this was overshadowed by a $0.11 shortfall in core fee income, attributed to weaker performance in capital markets. Despite these results, the bank’s management has opted to maintain its full-year earnings guidance. InvestingPro analysis reveals that 10 analysts have recently revised their earnings expectations downward, though the bank maintains strong financial health with an overall score of "FAIR."
PNC Financial’s end-of-period (EOP) loan growth was noted to be stronger than anticipated. Additionally, there is an expectation of improved capital markets growth in the latter half of the year, which contributed to the decision to uphold the earnings forecast.
The analyst from Keefe, Bruyette & Woods provided insight into the bank’s current valuation and future expectations. "Core Fees Hold Back the Quarter, but Guidance Holds; It was a mixed quarter for PNC with $0.05 better than expected NII, which was more than offset by $0.11 lower core fee income due to capital markets. That said, stronger EOP loan growth coupled with expectations for stronger capital markets growth in the second half of the year enabled management to maintain its full-year earnings guidance," the analyst stated.
However, the firm anticipates that PNC Financial may face continued pressure on its stock valuation, which currently stands at a 12% premium compared to its peers. This perspective is based on the bank’s return on tangible common equity (ROTCE) profile, which is a measure of financial performance. Notably, InvestingPro data shows PNC has maintained dividend payments for 55 consecutive years and currently generates $7.9 billion in levered free cash flow. For deeper insights into PNC’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, PNC Financial Services Group Inc. reported strong first-quarter earnings for 2025, with an earnings per share (EPS) of $3.51, surpassing the forecast of $3.39. Despite a slight revenue miss at $5.5 billion, the company’s performance was well-received, highlighting its cost management and operational efficiency. Analysts at Raymond (NSE:RYMD) James maintained a Market Perform rating on PNC, noting the company’s core earnings and pre-provision net revenue exceeded expectations. Evercore ISI also adjusted its price target for PNC from $205 to $180, while maintaining an Outperform rating due to cautious credit forecasting in the office commercial real estate sector.
The firm slightly lowered its EPS estimates for PNC for 2025 and 2026, reflecting a more conservative view of credit outcomes. Despite these adjustments, Evercore ISI remains confident in PNC’s growth potential, citing strong loan trends and interest rate positioning. Additionally, PNC announced an increase in its share repurchase program to $1.1 billion, signaling confidence in its capital return strategy. Raymond James analysts have raised their loan loss provision forecasts due to industry-wide credit uncertainty, yet they continue to monitor PNC’s relative valuation favorably. These developments underscore PNC’s strategic focus on technology investments and market expansion to drive growth.
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