The PNC Financial Services Group, Inc. (NYSE:PNC) shares fell 3.3% to US$153 in the week since its latest full-year results. Results look mixed - while revenue fell marginally short of analyst estimates at US$17b, statutory earnings were in line with expectations, at US$11.39 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following the latest results, PNC Financial Services Group's 14 analysts are now forecasting revenues of US$18.0b in 2020. This would be a satisfactory 5.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to increase 2.9% to US$11.76. In the lead-up to this report, analysts had been modelling revenues of US$18.0b and earnings per share (EPS) of US$11.95 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$163. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic PNC Financial Services Group analyst has a price target of US$181 per share, while the most pessimistic values it at US$140. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how PNC Financial Services Group forecasts compare to the wider market's forecast performance. It's clear from the latest estimates that PNC Financial Services Group's rate of growth is expected to accelerate meaningfully, with forecast 5.5% revenue growth noticeably faster than its historical growth of 3.1%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that PNC Financial Services Group is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at US$163, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for PNC Financial Services Group going out to 2021, and you can see them free on our platform here.
It might also be worth considering whether PNC Financial Services Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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