Ongoing Excellence At PNC, But At A Price

PNC Financial (PNC) continues to reap the benefits of sound strategic decisions ahead of this upturn in the rate cycle. The shares have responded to this outperformance, with the shares up more than 75% over the past two years and up a third over the last year - not quite as good as JPMorgan (JPM) or Bank of America (BAC) but still a very solid performance next to its regional bank peers.

Although PNC isn't especially asset-sensitive, the company's strategy of building its middle-market commercial and asset-based lending should continue to support growth as well as the company's willingness to lend in consumer areas like autos where other banks are pulling back. Lower taxes will certainly support a higher earnings growth rate and it may also support a decision to monetize the company's BlackRock (BLK) stake. I expect PNC to generate earnings growth at a mid-to-high single-digit rate on an adjusted basis, but the share price already amply reflects the growth prospects.

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Ongoing Excellence At PNC, But At A Price