Quality Not Helping PNC Financial Much, As Growth Concerns Mount

I expressed some concerns with PNC Financial’s (PNC) position vis a vis near-term growth prospects last quarter, and those concerns really haven’t gone away. I think this is a very well-run bank and a solid candidate for a long-term position, but the lackluster results (highlighted by weak loan and revenue growth) have led to relative underperformance compared to other large banks like BB&T (BBT), Bank of America (BAC), Wells Fargo (WFC), U.S. Bancorp (USB), and J.P. Morgan (JPM).

Not much has really changed in my basic view of PNC Financial. I do see some risks to the company’s middle-market lending business and its “thin branch” digital banking expansion, but I think those risks are more than adequately reflected in the share price. Likewise, while I don’t dismiss the risk of weaker economic conditions over the next two or three years, just low single-digit adjusted earnings growth is enough to drive an appealing long-term return from here.

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Quality Not Helping PNC Financial Much, As Growth Concerns Mount