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Is a Beat in Store for PNC Financial (PNC) in Q4 Earnings?


We expect The PNC Financial Services Group, Inc. PNC to beat earnings expectations when it report fourth-quarter 2016 results, before the opening bell on Jan 13.

Why a Likely Positive Surprise?

Our proven model shows that PNC Financial has the right combination of two key ingredients to beat earnings.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.61%. This is a major indicator of a likely positive earnings surprise for the company. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PNC Financial carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.

The combination of PNC Financial’s Zacks Rank #2 and ESP of +1.61% makes us confident of an earnings beat.

Further, the company boasts a decent earnings surprise history. PNC Financial posted an earnings beat in three of the trailing four quarters, with an average positive earnings surprise of 2.7%.

Shares of PNC Financial gained 34.4% over the past one year, outperforming the Zacks categorized Banks – Major Regional industry’s 31.5% growth.

What’s in Store in Q4?

PNC Financial’s NII is expected to remain stable in fourth-quarter 2016. Also, fee income is likely to remain flat. Purchase accounting accretion is estimated at around $50 million.

Non-interest expense is projected to rise sequentially at low single digits due to seasonally higher expenses and continued investments. Further, loan loss provision is estimated within $75–$125 million.

Period-end loans are projected to rise modestly during the quarter.

PNC Financial’s activities during the quarter were enough to win analysts’ confidence. As a result, over the last seven days, the Zacks Consensus Estimate for the quarter’s earnings increased slightly to $1.86.

Other Stocks to Consider

Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

BB&T Corporation BBT has an earnings ESP of +1.37% and a Zacks Rank #2. It is scheduled to report fourth-quarter results on Jan 19. You can see the complete list of today’s Zacks #1 Rank stocks here.

The earnings ESP for Citigroup Inc. C is +3.60% and it carries a Zacks Rank #2. The company is expected to release fourth-quarter results on Jan 18.

The Goldman Sachs Group, Inc. GS has an earnings ESP of +3.17% and a Zacks Rank #1. It is slated to report fourth-quarter results on Jan 18.

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