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Here's Why You Should Add PNC Financial to Your Portfolio Now
PNCPNC(PNC) ZACKS·2025-02-20 19:00

Core Viewpoint - PNC Financial Services Group, Inc. is demonstrating strong strategic initiatives and revenue growth, bolstered by decent liquidity and upward estimate revisions, which enhance investor confidence in the stock [1]. Revenue Growth - PNC has shown steady progress in revenue, with fee income growing at a six-year CAGR of 1.4% from 2018 to 2024, and net interest income (NII) experiencing a CAGR of 5.6% over the same period [6]. - For 2025, management anticipates NII to increase by 6-7% year-over-year and fee income to rise by 5% compared to the previous year, indicating a projected sales growth of 6%, surpassing the S&P 500 average growth rate of 4.5% [7]. Earnings Strength - Earnings are expected to rise, with projected EPS growth of 9.92%, compared to the S&P 500 average of 8.15%. PNC has consistently surpassed earnings estimates in the last four quarters, achieving an average positive earnings surprise of 9.77% [8]. Strategic Initiatives - To enhance its domestic presence, PNC plans to invest 1billiontoexpanditsbranchnetworkbyopeningover100locationsinkeycities,includingAustin,Dallas,Denver,Houston,Miami,andSanAntonio[9].−Thebankaimstorenovatemorethan1,200existingbranchesandhasannouncedanadditional1 billion to expand its branch network by opening over 100 locations in key cities, including Austin, Dallas, Denver, Houston, Miami, and San Antonio [9]. - The bank aims to renovate more than 1,200 existing branches and has announced an additional 500 million investment to increase the total to 1.5billionforopeningover200branchesandrenovating1,400locationsoverthenextfiveyears[10].−Focusingonkeygrowthmarkets,particularlyintheSouthwest,hasledtosignificantsuccessinexpandingthecustomerbaseandincreasingcheckingaccountsin2024[11].LiquidityPosition−AsofDecember31,2024,PNC′stotalavailableliquiditywas1.5 billion for opening over 200 branches and renovating 1,400 locations over the next five years [10]. - Focusing on key growth markets, particularly in the Southwest, has led to significant success in expanding the customer base and increasing checking accounts in 2024 [11]. Liquidity Position - As of December 31, 2024, PNC's total available liquidity was 41.2 billion, showing a sequential increase, while total borrowed funds decreased to 61.7billion[12].−Thebank′sseniordebtholdsinvestment−gradecreditratingsfrommajoragencies,allowingaccesstofavorabledebtmarketrates[13].CapitalDistribution−PNChasincreaseditsquarterlycashdividendsby3.261.7 billion [12]. - The bank's senior debt holds investment-grade credit ratings from major agencies, allowing access to favorable debt market rates [13]. Capital Distribution - PNC has increased its quarterly cash dividends by 3.2% to 1.60 per share in July 2024, with an annualized dividend growth rate of 9.1% over the past five years and a payout ratio of 46% [14]. - The company has a share repurchase program, having repurchased 0.5 billion shares in 2024 under a previously authorized plan of 100 million shares [15].