PNC Financial Services Group Inc. (NYSE: PNC) has confirmed that it will release its earnings for the quarter that ended on Friday, October 15, 2021, before the market open.
What to look for
The company had a strong second quarter thanks to the improvement of organic fee income. The BBVA USA acquisition positioned the company to grow its diverse revenue mix, and it has been executing strategic objectives well, whose impact will reflect in Q3 2021 earnings. In addition, growth of fee income on higher asset management income and service charge in deposit acted as tailwinds in Q2 and are likely to continue in Q3.
Earnings: Stockearnig’s Estimated EPS for Q3 2021 is expected to beat Q2 EPS of $4.5. This is based on historical EPS performance, with PNC Financial beating estimates ten times (83%) and missing twice (16%) in the past 12 quarters. In Q2, the company beat estimates of $3.16 per share and recorded EPS of $4.5.
Revenue: In Q2 2021, the company reported revenue of $4.7 billion, topping estimates of $4.4 billion, representing a 14% YoY growth. Net income improved 2% YoY to $2.58 billion attributed to interest-earning assets and low rates in deposits which was partially offset by outstanding loans and securities yields.
Stock movement: Since the last earnings release, the stock has gained 7.1%. Following the earnings release, the share price has been DOWN 25 times out of the last 47 quarters. So, the historical price reaction suggests a 53% probability of the share price going after PNC Financial releases its Q3 2021 earnings. According to the Stockearning algorithm, the predicted stock move on the first day is 2%, and the predicted move after seven days is 2%.
What analysts are saying
Citi analyst Keith Horowitz downgraded PNC Financial’s stock from “Buy” to “Hold” without a price target after withdrawing his previous price target of $210 in connection with the revised rating. The analyst sees less upside as he refreshes his models ahead of the third-quarter earnings season.
Recently RBC Capital analyst Gerard Cassidy raised his target price on PNC Financial from $190 to $200 but maintained a "Buy" rating on the stock. Cassidy told investors that the company's recent acquisition of BBVA expands its footprint, providing it with access to 29 MSAs in the US and offer strong growth opportunities. In addition, the analysts believe the company will execute on its incorporation plans to deliver cost savings of around $900 million in 2022, which will contribute to expected EPS accretion of more than 20%.
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