This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

PNC Leads Banks After Manufacturing Activity Improves

Stocks in this article: PNC I:BKX ^GSPC

NEW YORK ( TheStreet) -- PNC Financial Services Group (PNC - Get Report) of Pittsburgh led bank stocks higher on Monday, with shares rising 0.7% to close at $77.41.

The broad indices ended lower, as early results for Black Friday and Cyber Monday shopping indicated increased volume but lower spending from a year earlier.  Retail winners included Gap (GPS), which was up 1.5% to $41.58.   eBay (EBAY) was strong, with shares rising 1.6% to $51.35, while Groupon (GRPN) saw its shares slide 3.3% to close at $8.75, after Goldman Sachs cut its rating to "neutral" from "buy."

The KBW Bank Index (I:BKX) faded late to end with a decline of 0.2, closing at 67.65, after the Institute for Supply Management (ISM) said its manufacturing purchasing managers index (PMI) for November increased to 57.3% from 56.4% in October.  The PMI has increased each month since June, and the November reading was the highest during 2013.  A reading above 50% indicates expansion.  ISM said that 15 of 18 industries reported growth during November.

Despite a 32% increase for the KBW Bank Index this year -- outperforming the S&P 500 , which is up 26% -- KBW analyst Frederick Cannon still sees value in stocks of big bank stocks, since "forward earnings estimates for financials have risen during the year while they have fallen for the overall market."

In a note to clients on Sunday, Cannon wrote that valuations for financial stocks have a "compelling relative relative price-to-book valuation compared to the S&P. This suggests that there is little reason to expect relative underperformance of financial stocks in the year ahead and that select financial stocks continue to have compelling valuations, at least on a relative basis."

PNC

PNC's shares have returned 36% this year, following a return of 4% in 2012, assuming the reinvestment of dividends.  Based on a 44-cent quarterly payout, the shares have a dividend yield of 2.27%.  The shares trade for 1.5 times tangible book, according to Thomson Reuters Bank Insight, and for 11.1 times the consensus 2014 earnings estimate of $6.95 a share.  The consensus 2015 EPS estimate is $7.45.

Jefferies analyst Ken Usdin rates PNC a "buy," with a price target of $84.00, based on a multiple of 12.5 to his 2014 EPS estimate of $7.15.  After meetings with PNC management, the analyst in a note on Nov. 21 wrote "we continue to like progress on several fronts: 1) loan growth share gains, 2) fee oppt'y set; 3) underlying cost control; 4) capital return positioning."


PNC Chart PNC data by YCharts

RELATED STORIES:

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs