Shares of The PNC Financial Services Group (NYSE:PNC) are inching upward today after the company’s third-quarter EPS of $3.60 came in better than expected by $0.50. Revenue of $5.23 billion, however, missed the mark by $90 million.
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During the quarter, PNC’s provision for credit losses decreased sequentially to $129 million from $146 million. The company generated a positive operating leverage of 3% while keeping a lid on expenses in Q3. Further, its net interest income decreased by 3% sequentially to $3.4 billion as higher yields on interest-earnings assets were more than offset by higher funding costs.
On the other hand, its non-interest income rose by 2% to $1.8 billion on the back of higher residential and commercial mortgage revenue, which was partially offset by lower fees in capital markets and advisory.
Nonetheless, delinquencies ticked higher by 6% to $1.3 billion, and the company’s total nonperforming assets stood at $2.1 billion, indicating a rise of 11%. PNC has started lowering its headcount by 4% and expects net interest income in the fourth quarter to move lower in the range of 1% to 2% compared to the third quarter.
Is PNC Stock a Good Buy?
Overall, the Street has a Moderate Buy consensus rating on PNC. The average PNC price target of $139.82 implies a 15.25% potential upside. That’s after a nearly 24% drop in the share price so far this year.
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