PNC Financial's Short-Lived Decline

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In a report released last January 18, market analysts at BMO Capital Markets have given PNC Financial Services a reaffirmed “market perform” score.  The company has recently attained a $67 target rate on the stock, which is greater than its preceding target cost of $64.

PNC (NYSE: PNC), a financial services corporation based in Pittsburgh, Pennsylvania, primarily takes part in retail banking, property management, commercial and institutional banking, and residential finance banking, amongst many others.  It operates as a regional banking franchise in the District of Columbia and a number of states in the US, and offers products and services that concern specialized monetary businesses, corporations, and government units.

PNC’s Business Focus in 2013

PNC, which experienced an increase in revenue in the fourth quarter but a decline for its complete year in the course of credit and other charges, intends to maintain an incisive mind toward limiting expenditure in 2013. James Rohr, the company’s CEO, affirmed that the financial services corporation is still looking forward to the authorization from its supervisory body to put up the common stock surplus.

PNC provided an account of its fourth-quarter net revenue amounting to $664 million or $1.24 for each share, which marks a 47% increase from the previous year’s income of $451 million or 85 cents per share.  The company’s profit slid 6% to $2.83 billion, or $5.30 for every share in 2012, which sees a drop from its $3 billion, or $5.64 per share’s worth of proceeds in 2011. 

Rohr added that all in all, 2012 has been a good year for the company, citing that the bank has successfully achieved in creating a major thrust into South Eastern marketplaces with the $3.5 billion worth of purchases that the Royal Bank of Canada’s banking ventures in the United States has performed throughout the year.

Upon experiencing a depression in terms of its interest rates that consequently affected the company’s revenue margins, PNC seeks to continue lessening its expenses and providing its growing and new customers with first-rate financial services.

Other Slices of the Financial Pie

Comerica (NYSE: CMA), a financial services company headquartered in Dallas, Texas, experienced a 33.33% increase in its quarter income upon delivering a profit of $128 million, or 68 cents for every share, significantly higher than the net profit of $96 million that the bank has attained in the previous year’s quarter. Market analysts at Jefferies Group recently advanced the shares of Comerica, and gave it a “hold” score and a cost target of $35. 

Comerica achieved success in improving its balance sheet in its recent quarter, as the number of credits augmented at a rate of 4%, and as the company’s average assets fostered at a rate of 3%.  The financial services corporation’s outlay were flat in relation to the previous quarter, which suggests that the company may have to conduct more efforts of improving its long-term developments and obtain a secured growth.

The net income of Charles Schwab (NYSE: SCHW) rose at a rate of 15.95% to $189 million, or 15 cents for every share, in the company’s recent quarter, which is better than its net income of $163 million in the same quarter of the previous year.  The brokerage and banking corporation based in San Francisco California recounted that it has regulated its net gain to 15 cents for each share, which suggests that the company has achieved its mean estimation of $0.15.

The company’s fourth quarter net income was brought about by higher asset managing and administration costs. Its trading revenue, shares of discount stockbrokers, and shares of retirement scheme providers declined on account of the company’s higher operating outlays, which has influenced a number of market analysts to give it a score that ranges from hold to overweight.

Heading Towards a Good 2013

Based on several analyst predictions, the decline in revenue of PNC Financial Services is unlikely to repeat this year, or it will at least be significantly lower, especially in its mortgage offerings, credit foreclosure-associated costs, integration expenses, and transaction reporting user pack charges.  The industry should be motivated that the company’s main revenue finished better than what was previously expected in spite of a challenging operational setting. 

The management of PNC is dedicated to generate efficient operating leverages this year with an enhanced target of $700 million in unremitting development schemes. Lastly, the Pittsburgh-based company is optimistic that it will be capable of returning more capital to its investors for the current year, and that there would be no stock repurchases since it will be re-establishing its cash storages.


JosefRayDagatan has no position in any stocks mentioned. The Motley Fool owns shares of PNC Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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