ISI Gives Buy Rating, $70 PT to PNC Financial

In a company note issued earlier today, International Strategy & Investment Group LLC gave a rating of Buy to PNC Financial Services Group, Inc.

, along with setting a price target of $70. ISI went on to say in the report “While the redemptions will have a negative impact on PNC's 2012 earnings, they bolster future net interest income. For example, assuming PNC redeems the May TruPS with cash yielding only about 50bps, the redemption will reduce annual interest expense by about $31mn and would offset 1bp of NIM pressure. Even conservatively if the security is replaced with long-term debt (at about 3%), that would reduce annual interest expense by about $18mn. In total the redemption of all three NCC TruPS in 2012 would result in about $127mn of net interest expense savings or offset 5bps of NIM pressure if funded with low yielding cash and about $89mn in savings and 3bps of NIM pressure if funded with debt.” PNC Financial Services Group, Inc. closed at $61.75 yesterday.