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PNC Vs. Wells Fargo: Which Is Better Ahead Of Earnings Season

Friday, July 14 is an important day for the banking industry, as The PNC Financial Services Group, Inc. PNC and Wells Fargo & Company WFC, among several others, release their quarterly earnings reports.

Banking stocks have trended well as the Federal Reserve has continued to raise interest rates; nevertheless, stocks within the industry have not been able to replicate the gains they earned immediately after the election.

Wells Fargo is still attempting to bury its sales scam that caused intense political and public consequences, which led to several investigations and lawsuits, but regardless, the company has beaten its earnings projections in three of its last four operational quarters by an average of 1.52%.

PNC Financial reported increased revenue during the first-quarter of 2017 because of growth in loan and deposit balances. Nevertheless, a large amount of the revenue growth was offset by higher expenses.

So which stock looks better heading into earnings season? Let’s dive in.

Earnings History and ESP

PNC Financial has beaten its earnings estimates in a whopping nineteen of its past twenty operational quarters dating back to 2012. In fact, PNC has defeated its earnings projections in each of its past four quarters by an average of 4.95%. Meanwhile, Wells Fargo has topped its earnings estimates in eight of its past ten operational quarters.

As it stands now, the Zacks Consensus Estimate and Most Accurate Estimate for PNC’s earnings both stand at $2.01. That means its Earnings ESP sits at 0%. On the other hand, Wells Fargo currently holds an Earnings ESP of -0.98%, which means that the firm is looking slightly weaker headed into its earnings announcement.

In short, PNC Financial possesses a slightly more impressive earnings track record and its most recent estimates are looking slightly better.

Price Performance

PNC has witnessed its share price increase by 9.43% over the past twelve weeks, which beats the industry average of 9.04%. Wells Fargo’s share price has only grown by 4.94% over the same time period. In this case, PNC has the edge on momentum heading into these earnings announcements.

Growth Potential

PNC sports a projected EPS growth of 12.55%, while Wells Fargo sits at 2.33%. On the revenue side, Wells Fargo possesses a projected sales growth of 2.00% in comparison to PNC’s 6.21%. Yet again, PNC defeats Wells Fargo decisively in two major metrics that are vital to a company’s future growth prospects.

Conclusion

The comparative analysis shows PNC Financial Services has witnessed a more favorable share price movement throughout the past quarter. Additionally, PNC leads Wells Fargo in growth potential by exhibiting a more preferable projected EPS and sales growth. Further, PNC Financial Services has been slightly more consistent in defeating its earnings projections while Wells Fargo possesses a negative Earnings ESP.

PNC beats Wells Fargo in each category we have analyzed, which makes perfect sense considering it possesses the edge in Zacks Rank. Heading into their earnings announcements, PNC is a Zacks Rank #3 (Hold), while WFM remains a Zacks Rank #4 (Hold).

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PNC Financial Services Group, Inc. (The) (PNC): Free Stock Analysis Report
 
Wells Fargo & Company (WFC): Free Stock Analysis Report
 
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