PNC fell 16% in three months on margin fears despite $5.09 per share of profit last quarter. I see $21.20 per share next year and $243.80 in twelve months.
Key points
- $5.09 per share for last quarter of adjusted profit beat hopes on lower costs and loan growth last quarter.
- 2.94% margin for last quarter slipped as low spread loans and higher deposit costs offset lending income last quarter.
- $1.40 billion for last quarter returned to holders shows strength with core capital at 9.8% in September.
The call
The pullback looks overdone after a noisy quarter. At $214.94 per share today the stock trades at 11.1 times profit for this year. That profit is $19.35 per share for this year on my math. That pricing assumes margin pressure lasts, where margin means the spread on lending after funding costs.
Quarterly revenue shows FirstBank lift and Q4 rebound- Revenue reported
- Mine Q4 E
SEC filings and Oct 15 2026 release; Q4 is author estimate.
I see stronger profit ahead as loans reprice and fees recover. I forecast $21.20 per share of profit for next year on 4% lending income growth next quarter. That growth plus a margin above 3% next quarter supports an 18% return for next year on core capital, which measures profit on tangible equity.
Net interest income keeps climbing while margin lagsPNC Oct 15 2026 release; TBV and CET1 at Sep 30 2026.
Valuation
| Step | Figure |
|---|
| My 2026 profit | $19.35 per share |
| My 2027 profit | $21.20 per share |
| Fair multiple | 11.5 times earnings for 2027 |
| Twelve month target | $243.80 per share |
| Cash dividend | $8.00 per share per year |
| Peers trade near 11 times to 12 times profit for this year, so 11.5 times fits a strong regional lender. The 3.7% dividend yield per year pays holders while they wait. Upside near 13% in twelve months against modest downside supports a buy. | |
Risks
- Higher rates dent borrowing and lift deposit costs further, seen in slower loan balances and rising rates paid each month.
- Office loans sour beyond reserves, seen in rising bad loans and loan losses above $250 million per quarter.
- Fee income stays soft as deal activity cools, seen in weaker capital markets fees next quarter.
What would change my mind
I would turn cautious if loan growth stalls while deposit costs keep rising without margin recovery by next spring.