FBR Capital Markets Upgrades PNC Financial Services Group (PNC) And Raises Price Target

FBR Capital Markets analysts Paul J. Miller, Jr., William Wallace and Jessica Halenda raised their rating for shares of PNC Financial Services Group (NYSE: PNC) from Market Perform to Outperform and raised the price target from $55 to $65.

The analysts noted PNC Financial Services Group announced plans to pay back the $7.6 billion TARP investment and the boost in the company's common equity, which make it the sixth least risky stock of the companies covered in the analysts' Risk Index.

The FBR Capital Markets analysts wrote, "while we acknowledge that this earnings stream is lower quality, we believe that nearly $1.50 of this accretion can be recaptured as it stems from higher-cost CDs, which are transitioning into lower-cost core deposits at a rate greater than PNC's initial expectations, and as the non-credit-impaired loan customers refinance or reprice into normal balance sheet loans. PNC also has some of the strongest credit metrics relative to peers, which we believe should limit downside risk from current levels. If PNC recaptures any of the accretion from the non-credit-impaired portfolio, it should provide upside to our estimated $5.00 to $6.00 range of "normal" EPS."