PNC Financial (PNC): Evaluating Valuation After Q3 Profit Rise and Updated Growth Guidance

PNC Financial Services Group (PNC) just posted its third-quarter results, showing higher net income and earnings per share compared to a year ago. The update also included improved loan performance, a positive earnings outlook, and details on share buybacks.

See our latest analysis for PNC Financial Services Group.

PNC Financial Services Group’s most recent updates, including expectations for rising net interest income and an ongoing share buyback, come as the stock has faced some turbulence, with a 1-month share price return of -11.36%. While short-term price momentum has cooled, the company’s one-year total shareholder return of 1.41% turns positive when you include dividends. Its five-year total return nearly doubles your money, pointing to persistent long-term value creation despite near-term volatility.

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With profits rising, buybacks ongoing, and the stock trading at a notable discount to analyst targets, investors have to wonder if recent weakness presents a real buying opportunity or if the market is already pricing in future growth.

Most Popular Narrative: 17.8% Undervalued

PNC Financial Services Group closed at $182.17, while the most widely followed narrative points to a fair value of $221.74. This creates a sizable gap in favor of further upside if the narrative’s assumptions hold true. The current discount rate shaping this view is 7.45%, and it factors in PNC’s strong recent profit growth and its roadmap to expand revenue and earnings.

PNC expects positive operating leverage by maintaining well-controlled expenses while aiming for record net interest income (NII) growth of 6% to 7% for 2025, potentially boosting future earnings. The company is focusing on organic growth opportunities with an emphasis on customer acquisition and deepening relationships across its national franchise, which could drive revenue increases.

Read the complete narrative.

Curious what bold assumptions back this valuation? The fair value projection hinges on ambitious profit margin targets and a pivotal revenue growth thesis. One surprising variable could shift the entire outcome. Find out what’s fueling this optimism and what’s at risk by diving into the numbers behind the narrative.

Result: Fair Value of $221.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, elevated expenses from technology investments or a surprise downturn in capital markets could quickly undermine the optimistic outlook for PNC's earnings growth.

Find out about the key risks to this PNC Financial Services Group narrative.

Build Your Own PNC Financial Services Group Narrative

If this analysis misses the mark or you’d rather investigate the data on your own, you can craft a fresh perspective in just minutes: Do it your way

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding PNC Financial Services Group.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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