I didn't think PNC Financial (PNC)
was all that cheap coming out of second-quarter earnings, but I thought
a relatively better outlook for stable, positive performance from this
well-respected bank could give an edge to the shares. The shares have
outperformed the sector by a small margin since then (by around 1% to
2%), and PNC's low-drama third quarter should be reassuring for
investors.
Despite a less-favorable (at the moment)
skew toward commercial lending, PNC has a good set of fee-generating
businesses, credibility on cost leverage improvement, and organic growth
opportunities as the bank continues to target new markets for its
middle-market lending operation (Boston, Phoenix, Portland, and
Seattle). Valuation is just "okay", with prospective long-term
annualized returns in the high single digits to low double digits, but
an okay price for an above-average bank isn't a bad trade-off for
long-term investors.
Read the full article here:
PNC Financial Delivers A Low-Drama Quarter
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