PNC Financial, the Financial sector company, was revisited by a Wall Street analyst today. Analyst John McDonald CFA from Truist Financial maintained a Hold rating on the stock and has a $201.00 price target.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
John McDonald CFA’s rating is based on a combination of strategic and financial considerations surrounding PNC Financial’s recent acquisition of FirstBank. The acquisition is intended to bolster PNC’s presence in Colorado and Arizona by adding 95 branches and approximately $23 billion in deposits. However, the deal comes at a cost, with a valuation of about 2.4 times tangible book value, resulting in a tangible book value dilution of 3.8% and an earnback period of 3.3 years.
Despite these concerns, the acquisition is relatively small compared to PNC’s overall asset base and is expected to be modestly accretive to earnings per share. The transaction is not anticipated to disrupt PNC’s core business momentum or capital return plans. While the acquisition strengthens PNC’s regional footprint, it does not significantly advance its national scale ambitions, which may have contributed to the Hold rating by John McDonald CFA.