Intrinsic value of PNC Financial Services Group - PNC

Previous Close

$142.72

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$142.72

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as PNC.

We calculate the intrinsic value of PNC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 68.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
  5.16
  5.14
  5.13
Revenue, $m
  17,586
  18,893
  20,251
  21,662
  23,129
  24,654
  26,240
  27,891
  29,610
  31,400
  33,266
  35,211
  37,240
  39,358
  41,569
  43,878
  46,292
  48,815
  51,453
  54,214
  57,102
  60,126
  63,292
  66,608
  70,082
  73,722
  77,537
  81,535
  85,727
  90,123
Variable operating expenses, $m
  10,991
  11,808
  12,657
  13,539
  14,456
  15,409
  16,400
  17,432
  18,506
  19,625
  20,791
  22,007
  23,275
  24,599
  25,980
  27,424
  28,932
  30,509
  32,158
  33,884
  35,689
  37,579
  39,558
  41,630
  43,801
  46,076
  48,461
  50,960
  53,580
  56,327
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  10,991
  11,808
  12,657
  13,539
  14,456
  15,409
  16,400
  17,432
  18,506
  19,625
  20,791
  22,007
  23,275
  24,599
  25,980
  27,424
  28,932
  30,509
  32,158
  33,884
  35,689
  37,579
  39,558
  41,630
  43,801
  46,076
  48,461
  50,960
  53,580
  56,327
Operating income, $m
  6,595
  7,085
  7,594
  8,123
  8,673
  9,245
  9,840
  10,459
  11,104
  11,775
  12,475
  13,204
  13,965
  14,759
  15,588
  16,454
  17,359
  18,306
  19,295
  20,330
  21,413
  22,547
  23,735
  24,978
  26,281
  27,646
  29,076
  30,576
  32,148
  33,796
EBITDA, $m
  46,829
  50,308
  53,924
  57,682
  61,587
  65,649
  69,873
  74,269
  78,846
  83,613
  88,581
  93,760
  99,163
  104,802
  110,689
  116,839
  123,266
  129,984
  137,010
  144,360
  152,052
  160,104
  168,535
  177,365
  186,615
  196,307
  206,465
  217,113
  228,275
  239,979
Interest expense (income), $m
  1,317
  16,641
  16,106
  17,130
  18,195
  19,301
  20,450
  21,646
  22,890
  24,184
  25,531
  26,934
  28,397
  29,921
  31,512
  33,172
  34,905
  36,715
  38,607
  40,585
  42,653
  44,817
  47,081
  49,452
  51,933
  54,533
  57,256
  60,109
  63,099
  66,234
  69,520
Earnings before tax, $m
  -10,046
  -9,021
  -9,536
  -10,071
  -10,627
  -11,205
  -11,806
  -12,430
  -13,080
  -13,756
  -14,460
  -15,193
  -15,956
  -16,753
  -17,584
  -18,451
  -19,356
  -20,302
  -21,290
  -22,323
  -23,404
  -24,534
  -25,717
  -26,955
  -28,252
  -29,610
  -31,033
  -32,524
  -34,086
  -35,724
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -10,046
  -9,021
  -9,536
  -10,071
  -10,627
  -11,205
  -11,806
  -12,430
  -13,080
  -13,756
  -14,460
  -15,193
  -15,956
  -16,753
  -17,584
  -18,451
  -19,356
  -20,302
  -21,290
  -22,323
  -23,404
  -24,534
  -25,717
  -26,955
  -28,252
  -29,610
  -31,033
  -32,524
  -34,086
  -35,724

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  283,651
  304,726
  326,626
  349,387
  373,045
  397,645
  423,233
  449,860
  477,582
  506,457
  536,548
  567,921
  600,648
  634,803
  670,464
  707,714
  746,641
  787,335
  829,892
  874,413
  921,004
  969,776
  1,020,843
  1,074,328
  1,130,358
  1,189,067
  1,250,595
  1,315,088
  1,382,701
  1,453,594
Adjusted assets (=assets-cash), $m
  283,651
  304,726
  326,626
  349,387
  373,045
  397,645
  423,233
  449,860
  477,582
  506,457
  536,548
  567,921
  600,648
  634,803
  670,464
  707,714
  746,641
  787,335
  829,892
  874,413
  921,004
  969,776
  1,020,843
  1,074,328
  1,130,358
  1,189,067
  1,250,595
  1,315,088
  1,382,701
  1,453,594
Revenue / Adjusted assets
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
Average production assets, $m
  402,340
  432,234
  463,299
  495,583
  529,141
  564,034
  600,329
  638,098
  677,420
  718,377
  761,058
  805,560
  851,981
  900,427
  951,010
  1,003,847
  1,059,062
  1,116,784
  1,177,149
  1,240,300
  1,306,386
  1,375,565
  1,448,000
  1,523,865
  1,603,341
  1,686,615
  1,773,889
  1,865,368
  1,961,272
  2,061,830
Working capital, $m
  -346,978
  -372,759
  -399,549
  -427,391
  -456,331
  -486,423
  -517,724
  -550,296
  -584,207
  -619,528
  -656,337
  -694,715
  -734,749
  -776,529
  -820,151
  -865,718
  -913,336
  -963,115
  -1,015,174
  -1,069,635
  -1,126,628
  -1,186,288
  -1,248,756
  -1,314,182
  -1,382,722
  -1,454,538
  -1,529,802
  -1,608,694
  -1,691,402
  -1,778,123
Total debt, $m
  298,257
  317,225
  336,936
  357,420
  378,713
  400,853
  423,882
  447,846
  472,796
  498,783
  525,865
  554,101
  583,555
  614,294
  646,389
  679,915
  714,948
  751,573
  789,875
  829,944
  871,876
  915,770
  961,731
  1,009,867
  1,060,294
  1,113,132
  1,168,507
  1,226,551
  1,287,403
  1,351,207
Total liabilities, $m
  255,285
  274,253
  293,964
  314,448
  335,741
  357,881
  380,910
  404,874
  429,824
  455,811
  482,893
  511,129
  540,583
  571,322
  603,417
  636,943
  671,976
  708,601
  746,903
  786,972
  828,904
  872,798
  918,759
  966,895
  1,017,322
  1,070,160
  1,125,535
  1,183,579
  1,244,431
  1,308,235
Total equity, $m
  28,365
  30,473
  32,663
  34,939
  37,305
  39,765
  42,323
  44,986
  47,758
  50,646
  53,655
  56,792
  60,065
  63,480
  67,046
  70,771
  74,664
  78,733
  82,989
  87,441
  92,100
  96,978
  102,084
  107,433
  113,036
  118,907
  125,059
  131,509
  138,270
  145,359
Total liabilities and equity, $m
  283,650
  304,726
  326,627
  349,387
  373,046
  397,646
  423,233
  449,860
  477,582
  506,457
  536,548
  567,921
  600,648
  634,802
  670,463
  707,714
  746,640
  787,334
  829,892
  874,413
  921,004
  969,776
  1,020,843
  1,074,328
  1,130,358
  1,189,067
  1,250,594
  1,315,088
  1,382,701
  1,453,594
Debt-to-equity ratio
  10.510
  10.410
  10.320
  10.230
  10.150
  10.080
  10.020
  9.960
  9.900
  9.850
  9.800
  9.760
  9.720
  9.680
  9.640
  9.610
  9.580
  9.550
  9.520
  9.490
  9.470
  9.440
  9.420
  9.400
  9.380
  9.360
  9.340
  9.330
  9.310
  9.300
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -10,046
  -9,021
  -9,536
  -10,071
  -10,627
  -11,205
  -11,806
  -12,430
  -13,080
  -13,756
  -14,460
  -15,193
  -15,956
  -16,753
  -17,584
  -18,451
  -19,356
  -20,302
  -21,290
  -22,323
  -23,404
  -24,534
  -25,717
  -26,955
  -28,252
  -29,610
  -31,033
  -32,524
  -34,086
  -35,724
Depreciation, amort., depletion, $m
  40,234
  43,223
  46,330
  49,558
  52,914
  56,403
  60,033
  63,810
  67,742
  71,838
  76,106
  80,556
  85,198
  90,043
  95,101
  100,385
  105,906
  111,678
  117,715
  124,030
  130,639
  137,556
  144,800
  152,387
  160,334
  168,662
  177,389
  186,537
  196,127
  206,183
Funds from operations, $m
  30,188
  34,202
  36,794
  39,487
  42,287
  45,198
  48,227
  51,379
  54,662
  58,082
  61,646
  65,363
  69,242
  73,290
  77,517
  81,934
  86,550
  91,377
  96,425
  101,707
  107,235
  113,022
  119,083
  125,431
  132,082
  139,051
  146,356
  154,013
  162,041
  170,459
Change in working capital, $m
  -24,807
  -25,780
  -26,790
  -27,842
  -28,941
  -30,092
  -31,301
  -32,572
  -33,911
  -35,321
  -36,809
  -38,378
  -40,033
  -41,780
  -43,623
  -45,567
  -47,617
  -49,779
  -52,059
  -54,461
  -56,993
  -59,660
  -62,469
  -65,426
  -68,539
  -71,816
  -75,264
  -78,892
  -82,708
  -86,721
Cash from operations, $m
  54,995
  59,983
  63,584
  67,329
  71,227
  75,290
  79,528
  83,952
  88,573
  93,403
  98,455
  103,741
  109,275
  115,070
  121,140
  127,501
  134,167
  141,156
  148,484
  156,168
  164,228
  172,682
  181,552
  190,857
  200,622
  210,868
  221,620
  232,905
  244,749
  257,180
Maintenance CAPEX, $m
  -37,357
  -40,234
  -43,223
  -46,330
  -49,558
  -52,914
  -56,403
  -60,033
  -63,810
  -67,742
  -71,838
  -76,106
  -80,556
  -85,198
  -90,043
  -95,101
  -100,385
  -105,906
  -111,678
  -117,715
  -124,030
  -130,639
  -137,556
  -144,800
  -152,387
  -160,334
  -168,662
  -177,389
  -186,537
  -196,127
New CAPEX, $m
  -28,766
  -29,894
  -31,065
  -32,284
  -33,558
  -34,893
  -36,295
  -37,769
  -39,321
  -40,957
  -42,682
  -44,501
  -46,421
  -48,446
  -50,583
  -52,837
  -55,215
  -57,722
  -60,365
  -63,151
  -66,086
  -69,179
  -72,436
  -75,865
  -79,475
  -83,275
  -87,273
  -91,480
  -95,904
  -100,558
Cash from investing activities, $m
  -66,123
  -70,128
  -74,288
  -78,614
  -83,116
  -87,807
  -92,698
  -97,802
  -103,131
  -108,699
  -114,520
  -120,607
  -126,977
  -133,644
  -140,626
  -147,938
  -155,600
  -163,628
  -172,043
  -180,866
  -190,116
  -199,818
  -209,992
  -220,665
  -231,862
  -243,609
  -255,935
  -268,869
  -282,441
  -296,685
Free cash flow, $m
  -11,129
  -10,145
  -10,704
  -11,285
  -11,889
  -12,517
  -13,171
  -13,850
  -14,558
  -15,296
  -16,064
  -16,866
  -17,702
  -18,574
  -19,486
  -20,437
  -21,432
  -22,472
  -23,560
  -24,698
  -25,888
  -27,135
  -28,441
  -29,808
  -31,240
  -32,741
  -34,314
  -35,963
  -37,692
  -39,505
Issuance/(repayment) of debt, $m
  -9,916
  18,968
  19,711
  20,484
  21,293
  22,140
  23,029
  23,965
  24,949
  25,987
  27,082
  28,236
  29,454
  30,739
  32,095
  33,525
  35,034
  36,625
  38,302
  40,069
  41,932
  43,894
  45,961
  48,137
  50,427
  52,838
  55,375
  58,044
  60,851
  63,804
Issuance/(repurchase) of shares, $m
  38,560
  11,129
  11,726
  12,347
  12,993
  13,665
  14,365
  15,093
  15,852
  16,643
  17,469
  18,330
  19,229
  20,168
  21,150
  22,176
  23,249
  24,371
  25,546
  26,775
  28,063
  29,411
  30,824
  32,304
  33,855
  35,481
  37,186
  38,973
  40,847
  42,813
Cash from financing (excl. dividends), $m  
  28,644
  30,097
  31,437
  32,831
  34,286
  35,805
  37,394
  39,058
  40,801
  42,630
  44,551
  46,566
  48,683
  50,907
  53,245
  55,701
  58,283
  60,996
  63,848
  66,844
  69,995
  73,305
  76,785
  80,441
  84,282
  88,319
  92,561
  97,017
  101,698
  106,617
Total cash flow (excl. dividends), $m
  17,515
  19,951
  20,733
  21,546
  22,397
  23,288
  24,223
  25,207
  26,243
  27,335
  28,486
  29,700
  30,981
  32,333
  33,759
  35,264
  36,850
  38,524
  40,288
  42,147
  44,106
  46,170
  48,344
  50,633
  53,042
  55,578
  58,246
  61,054
  64,007
  67,113
Retained Cash Flow (-), $m
  -38,560
  -11,129
  -11,726
  -12,347
  -12,993
  -13,665
  -14,365
  -15,093
  -15,852
  -16,643
  -17,469
  -18,330
  -19,229
  -20,168
  -21,150
  -22,176
  -23,249
  -24,371
  -25,546
  -26,775
  -28,063
  -29,411
  -30,824
  -32,304
  -33,855
  -35,481
  -37,186
  -38,973
  -40,847
  -42,813
Prev. year cash balance distribution, $m
  148
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -20,896
  8,823
  9,006
  9,199
  9,404
  9,623
  9,859
  10,114
  10,391
  10,691
  11,017
  11,370
  11,752
  12,165
  12,610
  13,088
  13,602
  14,153
  14,742
  15,372
  16,043
  16,759
  17,520
  18,329
  19,187
  20,097
  21,061
  22,081
  23,159
  24,300
Discount rate, %
  14.90
  15.65
  16.43
  17.25
  18.11
  19.02
  19.97
  20.97
  22.01
  23.11
  24.27
  25.48
  26.76
  28.10
  29.50
  30.98
  32.52
  34.15
  35.86
  37.65
  39.53
  41.51
  43.59
  45.77
  48.05
  50.46
  52.98
  55.63
  58.41
  61.33
PV of cash for distribution, $m
  -18,187
  6,597
  5,707
  4,868
  4,091
  3,386
  2,757
  2,206
  1,734
  1,336
  1,009
  746
  539
  380
  261
  175
  113
  71
  44
  26
  15
  8
  4
  2
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  35.9
  25.9
  18.8
  13.7
  10.0
  7.4
  5.4
  4.0
  3.0
  2.2
  1.7
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

The PNC Financial Services Group, Inc. is a diversified financial services company. The Company has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management. The Company operates through four segments: Retail Banking, Corporate & Institutional Banking, Asset Management Group, and BlackRock. Retail Banking provides deposit, lending, brokerage, investment management and cash management products and services. Corporate & Institutional Banking provides lending, treasury management and capital markets-related products and services. Asset Management Group includes personal wealth management for high net worth and ultra-high net worth clients and institutional asset management. BlackRock, in which the Company holds an equity investment, is a publicly traded investment management firm providing investment and risk management services to institutional and retail clients across the world.

FINANCIAL RATIOS  of  PNC Financial Services Group (PNC)

Valuation Ratios
P/E Ratio 17.7
Price to Sales 0
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 19
Price to Free Cash Flow 19
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 76.9%
Total Debt to Equity 76.9%
Interest Coverage 5
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 4.9%
Ret/ On T. Cap. - 3 Yr. Avg. 5.1%
Return On Equity 8.6%
Return On Equity - 3 Yr. Avg. 9.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 24.1%
Eff/ Tax Rate - 3 Yr. Avg. 24.7%
Payout Ratio 32.5%

PNC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PNC stock intrinsic value calculation we used $16329 million for the last fiscal year's total revenue generated by PNC Financial Services Group. The default revenue input number comes from 2017 income statement of PNC Financial Services Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PNC stock valuation model: a) initial revenue growth rate of 7.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.9%, whose default value for PNC is calculated based on our internal credit rating of PNC Financial Services Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of PNC Financial Services Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PNC stock the variable cost ratio is equal to 62.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for PNC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for PNC Financial Services Group.

Corporate tax rate of 27% is the nominal tax rate for PNC Financial Services Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PNC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PNC are equal to 2287.8%.

Life of production assets of 10 years is the average useful life of capital assets used in PNC Financial Services Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PNC is equal to -1973%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for PNC Financial Services Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 481 million for PNC Financial Services Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of PNC Financial Services Group at the current share price and the inputted number of shares is $68.6 billion.

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COMPANY NEWS

▶ PNC loses a few top bankers, looks to fill open spots in Louisville   [Aug-10-18 12:28PM  American City Business Journals]
▶ New team, new space, next goal: PNC stakes its Nashville territory   [Aug-03-18 12:10PM  American City Business Journals]
▶ PNC launches latest mobile banking unit   [10:38AM  American City Business Journals]
▶ The Banking Sectors Top-Paid CEOs   [Jul-23-18 12:12PM  InvestorPlace]
▶ Pittsburgh bank names first Houston president   [02:51PM  American City Business Journals]
▶ PNC taking it to the malls with ad campaign's next phase   [02:07PM  American City Business Journals]
▶ Bank of America's Strong Results Lift Financials on Monday   [Jul-16-18 06:12PM  TheStreet.com]
▶ PNC Bank to debut middle market corporate banking in Phoenix   [Jul-14-18 11:00AM  American City Business Journals]
▶ [$$] PNC Earnings Boosted by Increase in Lending   [Jul-13-18 11:47PM  The Wall Street Journal]
▶ [$$] PNC Earnings Boosted by Increase in Lending   [05:24PM  The Wall Street Journal]
▶ PNC picks Boston as next city for expansion   [02:21PM  American City Business Journals]
▶ Here's why PNC is entering Boston and Phoenix   [01:10PM  American City Business Journals]
▶ Keep an Eye on Business Loans   [08:28AM  The Wall Street Journal]
▶ Bank Notes: Navient CEO pushes back after California lawsuit   [07:48AM  American City Business Journals]
▶ Why PNC believes virtual works   [02:01PM  American City Business Journals]
▶ PNC Financial Lifts Dividend 27%   [11:59AM  Barrons.com]
▶ Trade risk is large and growing: Expert   [Jul-05-18 01:56PM  CNBC Videos]
▶ PNC raises dividend to new high   [12:45PM  American City Business Journals]
▶ PNC Receives No Objection To Its Capital Plan   [Jun-28-18 04:52PM  PR Newswire]
▶ Banks are paying customers to open checking accounts   [Jun-25-18 02:41PM  American City Business Journals]
▶ Exclusive: PNC puts Fairmont Pittsburgh up for sale   [01:56PM  American City Business Journals]
▶ Bank Notes: KeyCorp's branch closing plan hits Greater Philadelphia   [07:32AM  American City Business Journals]
▶ $10.5M funding deal creates jobs, focus on future workforce in Bradenton   [Jun-22-18 07:26AM  American City Business Journals]
▶ New office tower in downtown Denver snags bank tenant   [01:35PM  American City Business Journals]
▶ How local companies are making their workplaces more LGBTQ inclusive   [Jun-20-18 07:52AM  American City Business Journals]
▶ PNC leader: This new N.C. branch is the 'future of banking'   [Jun-19-18 06:16AM  American City Business Journals]
▶ PNC provides financing for acquisition of national retailer of athletic shoes   [Jun-18-18 01:08PM  American City Business Journals]
▶ [$$] Movers & shakers: June 18   [Jun-17-18 09:00PM  Financial Times]
▶ PNC Changes Prime Rate   [Jun-13-18 05:09PM  PR Newswire]
▶ Tweeting complaints could make your bank account vulnerable   [Jun-08-18 01:02PM  Yahoo Finance Video]
▶ Volcker rule revisions would put banks back in private equity   [Jun-05-18 02:00PM  American City Business Journals]
▶ Jim Cramer: Italy Was So Yesterday   [May-30-18 07:01PM  TheStreet.com]
▶ PNC to 'experiment in retail' with national expansion   [12:49PM  American City Business Journals]
▶ Exclusive: A chat with PNC Bank's new Denver market president   [May-23-18 10:00AM  American City Business Journals]
▶ House set to approve bank deregulation legislation   [May-22-18 09:16AM  MarketWatch]
▶ Here's why a prominent civil rights organization is honoring PNC   [May-16-18 01:35PM  American City Business Journals]
▶ PNC CEO honored for promoting diversity and equal opportunity in the workplace   [May-11-18 11:51AM  American City Business Journals]
▶ Here's why loans rose in 1Q at Pittsburgh banks   [01:57PM  American City Business Journals]
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