Last Update 31 Oct 25

Fair value Decreased 0.39%

Analysts have slightly reduced their fair value estimate for PNC Financial Services Group to approximately $220.88 per share. This change reflects incremental adjustments to discount rate and growth assumptions as recent research highlights continued strong loan growth, resilient fundamentals, and capital flexibility amid evolving market dynamics.

Analyst Commentary

Recent street research on PNC Financial Services Group reflects a vibrant discussion around the company's near-term prospects and strategic positioning. Analysts are weighing evolving capital markets, merger activity within the regional banking sector, and the firm's growth initiatives, notably its announced acquisition of FirstBank.

Bullish Takeaways

Bullish analysts have raised price targets for PNC, citing ongoing strong loan growth and resilient fundamentals. These factors are expected to support top- and bottom-line growth despite macro uncertainty.
Recent bank sector rallies, boosted by deregulation and improving capital markets, have contributed to upward momentum in share prices and higher valuation expectations for select regional banks like PNC.
The acquisition of FirstBank is viewed as both strategically significant and low risk. It provides increased scale in attractive Western markets while not disrupting PNC's organic growth initiatives or capital flexibility.
Ongoing improvements in fixed asset repricing and steady core business momentum are expected to create additional tailwinds for shareholder returns. This is especially the case if management signals ongoing margin and fee growth improvement in upcoming quarters.

Bearish Takeaways

Some bearish analysts maintain that, following recent rallies, banking sector valuations are less compelling. They believe selectivity is warranted given the pace of share price appreciation relative to earnings estimate revisions.
Concerns persist around the impact of potential future interest rate cuts and whether net interest margin improvements can be sustained, especially as pricing power may diminish.
While the FirstBank deal is considered manageable, skeptics question whether it will meaningfully boost long-term earnings or simply maintain the current growth trajectory without unlocking significant new value.
A cautious view remains on the overall sector, as bank stocks are no longer seen as inexpensive. There is particular wariness around the sustainability of above-trend loan growth and capital markets revenue.

What's in the News

PNC Financial announced the $4.1 billion acquisition of FirstBank Holding Co, expanding its assets to nearly $600 billion and retaining almost 100 branches in Colorado and Arizona (The Wall Street Journal).
CEO Bill Demchak revealed plans to transform PNC into a trillion-dollar bank. He highlighted the FirstBank purchase as a significant initial step toward this long-term growth goal (The Wall Street Journal).
PNC has launched the "Mane St. Branch" popup experience in North Texas and emphasized its strategy to expand, with 17 new branches planned and over 200 more locations scheduled to open nationwide in the coming years.
The company is involved in a nationwide class action lawsuit, accused alongside other major banks of conspiring to fix prime rates and overcharge customers on loans tied to the Wall Street Journal Prime Rate.
PNC recently reported a decrease in net loan charge-offs and forecasts fourth-quarter net charge-offs between $200 million and $225 million.

Valuation Changes

The Fair Value Estimate has been reduced slightly from $221.74 to $220.88 per share.
The Discount Rate increased modestly, moving from 7.45% to 7.47%.
The Revenue Growth assumption rose slightly from 4.35% to 4.37%.
The Net Profit Margin increased incrementally from 26.03% to 26.04%.
The Future P/E ratio has fallen marginally, changing from 16.08x to 16.01x.

PNC aims for revenue expansion through controlled expenses and strategic customer acquisition, focusing on organic growth and deepening relationships.
Implementing interest rate management strategies and strong leadership positions PNC for stable margins and improved operational efficiencies.
Economic uncertainties and volatile capital markets could pressure PNC's noninterest income and net margins, while investment and efficiency strategies might strain expenses.

Catalysts

About PNC Financial Services Group

Operates as a diversified financial services company in the United States.What are the underlying business or industry changes driving this perspective?

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.
An increase in commercial and industrial (C&I) loan utilization and new commitments suggest a potential for growth in loan balances and associated interest income, supporting revenue expansion.
PNC has implemented forward starting swaps to reduce interest rate sensitivity and lock in fixed-rate asset repricing, stabilizing future margins and supporting consistent earnings growth.
The appointment of a new President with a strong background in financial services and technology positions PNC to enhance its strategic execution, potentially leading to improved operational efficiencies and higher net margins.

PNC Financial Services Group Earnings and Revenue Growth

PNC Financial Services Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming PNC Financial Services Group's revenue will grow by 4.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 27.5% today to 26.5% in 3 years time.
Analysts expect earnings to reach $6.5 billion (and earnings per share of $18.0) by about September 2028, up from $5.8 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $8.2 billion in earnings, and the most bearish expecting $5.7 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.8x on those 2028 earnings, up from 13.5x today. This future PE is greater than the current PE for the US Banks industry at 11.9x.
Analysts expect the number of shares outstanding to decline by 0.75% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.35%, as per the Simply Wall St company report.

PNC Financial Services Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Uncertainty surrounding tariffs and potential recession risks may impact client activity and lead to fluctuations in noninterest income, impacting PNC's revenue and earnings.
Capital markets-related fees, such as M&A advisory and trading revenue, have shown volatility and softer performance, which could pressure overall noninterest income and therefore net margins.
The potential impact of changes in deposit balances and rate sensitivity on net interest income, if credit spreads widen and capital markets become less attractive, could affect earnings growth.
The mild recession scenario with rising unemployment could necessitate expense leverage and efficiency measures, potentially affecting net margins through increased noninterest expense.
The commitment to investing in technology and business activities amidst uncertain economic conditions may pressure expenses, potentially impacting overall net margins if revenues do not keep pace.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $215.727 for PNC Financial Services Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $238.0, and the most bearish reporting a price target of just $186.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $24.5 billion, earnings will come to $6.5 billion, and it would be trading on a PE ratio of 15.8x, assuming you use a discount rate of 7.4%.
Given the current share price of $200.41, the analyst price target of $215.73 is 7.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

PNC: Expansion Into Western Markets Will Drive Long-Term Asset Scale