PNC Financial Services Group Inc Stock Buy Recommendation Reiterated (PNC)

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 ( TheStreet) -- PNC Financial Services Group (NYSE: PNC) 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.

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 30.16%, 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.
  • 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. But, we feel it is poised for EPS growth 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. This year, the market expects an improvement in earnings ($5.68 versus $5.64).
  • Despite the weak revenue results, PNC has outperformed against the industry average of 16.3%. 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Commercial Banks industry and the overall market, PNC FINANCIAL SVCS GROUP INC's return on equity is below that of both the industry average and the S&P 500.

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 10.4, below the average banking industry P/E ratio of 12.5 and below the S&P 500 P/E ratio of 17.7. PNC Financial Services Group has a market cap of $31.98 billion and is part of the financial sector and banking industry. Shares are up 3.6% year to date as of the close of trading on Wednesday.

You can view the full PNC Financial Services Group Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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