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Shares of The PNC Financial Services Group, Inc. (PNC - Free Report) achieved a new 52-week high, touching $77.93 on Aug 2, 2013. The closing price of this major regional bank reflects a robust year-to-date return of 32.5%. The trading volume for the session was 2.7 million shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left due to its expected long-term earnings growth rate of 4.7%.

Growth Drivers

Impressive second-quarter 2013 results, a strong capital position and healthy capital deployment activities were the company’s primary growth drivers.

PNC Financial’s second-quarter earnings beat the Zacks Consensus Estimate by 21%. The results benefited from reduced expenses and growth in non-interest income, partly offset by a fall in net interest income. Further, enhanced credit quality was a positive.

Further, over the years, PNC Financial’s capital deployment initiatives through dividend payments and share buybacks boosted the confidence of yield seeking investors. Since 2011, the company has hiked its dividend every year. Moreover, opportunistic acquisitions such as that of the Flagstar Bank and the U.S. banking operations of Royal Bank of Canada (RY - Free Report) will likely enhance the stock’s value further.

We believe that PNC Financial is well poised for growth, given its diverse revenue mix, efforts to strengthen the balance sheet, improving credit quality, strategic acquisitions and steady capital levels. However, a protracted economic recovery, persistent low interest-rate environment and increased regulatory headwinds are likely to limit profitability.

Estimate Revisions

For 2013, the Zacks Consensus Estimate moved north by 5% to $7.02 per share over the last 30 days. For 2014, the Zacks Consensus Estimate inched up 1% to $6.95 per share over the same time period.

Other better performing banks include Wells Fargo & Company (WFC - Free Report) and KeyCorp. (KEY - Free Report) , both of which carry a Zacks Rank #2 (Buy).

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