Nomura Securities Begins Coverage of PNC with a “Buy” Rating (PNC)

Nomura Securities reported on Wednesday that they have initiated coverage of financial services company, PNC Financial Services(PNC).

The firm has begun coverage of PNC with a “Buy” rating and $72 price target. This price target suggests a 12.5% increase from the stock’s current price of $63.

An analyst from the firm commented, “PNC has evolved into a top 10 U.S. bank (by assets and deposits) through a combination of key acquisitions (e.g., National City in 2008) and organic growth. We expect PNC’s core franchise to perform well in 2013, as loan growth and solid fee revenue lead to a modest increase in revenue. In addition, we expect PNC to post 700bps of positive operating leverage, as some of the expense noise from 2012 (e.g., integration costs) shrinks or goes away, and we expect PNC to reach its 8.0-8.5% Basel III T1C target by the end of 2013. The stock trades at a discount to the group on both a P/B and P/E basis, and we do not think investors have baked in high expectations. FY13E EPS at $6.47; FY14E EPS at $6.82.”

PNC shares were mostly flat during Wednesday morning trading. The stock has increased 3% in the past year.

The Bottom Line
Shares of PNC Financial Services(PNC) have a 2.54% yield, based on Wednesday morning’s price of $63.

PNC Financial Services(PNC) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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