Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
(NYSE:) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The gross profit margin for PNC FINANCIAL SVCS GROUP INC is currently very high, coming in at 86.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.20% trails the industry average.
- Compared to its closing price of one year ago, PNC's share price has jumped by 30.84%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Despite the weak revenue results, PNC has outperformed against the industry average of 16.5%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PNC FINANCIAL SVCS GROUP INC's earnings per share declined by 41.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PNC FINANCIAL SVCS GROUP INC increased its bottom line by earning $5.64 versus $4.99 in the prior year. For the next year, the market is expecting a contraction of 0.2% in earnings ($5.63 versus $5.64).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 39.6% when compared to the same quarter one year ago, falling from $913.00 million to $551.00 million.
The PNC Financial Services Group, Inc. operates as a diversified financial services company in the United States and internationally. The company's Retail Banking segment provides deposit, lending, brokerage, investment management, and cash management services. The company has a P/E ratio of 12.8, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. PNC Financial Services Group has a market cap of $32.28 billion and is part of the sector and industry. Shares are up 7.6% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.