PNC Q2 Earnings Beat Estimates as Record Revenue, NII Growth Drive RBC Price Target

PNC Financial Services Group Inc (NYSE:PNC) reported on Wednesday better-than-expected second-quarter results.

The company’s tangible book value (TBV) grew during the quarter, positioning it for enhanced organic growth, according to RBC Capital Markets.

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The PNC Financial Services Group Analyst: Analyst Gerard Cassidy maintained an Outperform rating, while raising the price target from $235 to $273.

The PNC Financial Services Group Thesis: The company reported record revenues, net interest income (NII) and fee income for the quarter, Cassidy said in the note.

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He highlighted the following from PNC Financial Services Group’s results:

• Total revenue grew 12% sequentially and 21% year-on-year to a record of $6.9 billion.
• Net income came in at $2.1 billion.
• Diluted earnings grew 16% sequentially and 25% year-on-year to $4.81 per share.
• Adjusted earnings came in at $4.85 per share.
• TBV grew 1.5% to $111.09 per share, from $109.42 per share in the prior quarter and up 6.9% year-on-year.
• Net interest income was $4.1 billion, versus $4 billion in the prior quarter and $3.6 billion in the year-ago quarter. Net interest income grew 4% sequentially, driven by commercial loan growth and higher noninterest-bearing deposit balances.
• Noninterest income was $2.8 billion, versus $2.2 billion in the prior quarter and $2.1 billion in the year-ago quarter. Excluding one-time items, noninterest income grew 16% sequentially, driven by growth across all fee categories, including record capital markets and advisory revenue.

The company has enhanced its organic growth with accretive tangible book value acquisitions, the analyst stated.

"Long-term shareholder returns are driven by TBV per share and dividend per share growth, in our opinion," he further wrote.

PNC Price Action: Shares of PNC Financial Services Group had risen by 0.31% to $254.87 at the time of publication on Thursday.