UPDATE: ISI Group Initiates Coverage on PNC Financial as NII Headwinds Limit Upside

In a report published Tuesday, ISI Group analyst Keith Murray initiated coverage on

with a Neutral rating and $79.00 price target. In the report, ISI Group noted, “We are initiating coverage of PNC Financial with a Neutral rating and 12-month price target of $79. We think PNC has made progress on controlling expenses, improving its revenue balance (building fee income contribution), and getting its capital on solid footing (8.2% Basel 3 T1C ratio including the BlackRock stake deduction). While the stock is not expensive on PE at ~10x our 2015E EPS, we think the headwind of sluggish NII (accretable yield wind down and sluggish core trends) given soft loan demand will limit upside in the near term. We see better value in WFC and FITB at a similar PE.” PNC Financial Services Group closed on Monday at $71.88.