Despite the continued concerns related to the pandemic and low rates, it seems to be a wise idea to add Pinnacle Financial Partners, Inc. PNFP stock to your portfolio now. The bank boasts solid fundamental and prospects.
Also, the stock has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. The Zacks Consensus Estimate for its current-year earnings has been revised 1.5% upward over the past seven days, while that for the next year has been raised 3.1%. It currently carries a Zacks Rank #2 (Buy).
However, shares of the company have gained 8% over the past three months, underperforming the industry’s rally of 15.7%.
Here are a few factors that make Pinnacle Financial stock an attractive pick now.
Earnings Growth: The company witnessed earnings growth of 17.1% in the past three to five years, higher than the industry average of 13.7%. While its earnings are projected to decline 26.3% in 2020, the trend will likely reverse after that. In 2021, earnings are expected to grow 17.8%.
Revenue Strength: Pinnacle Financial’s revenues witnessed a compounded annual growth rate (CAGR) of 40.5% over the last five years (2015-2019). The uptrend in revenues is expected to continue in the near term as reflected by the company’s projected sales growth rate of 7.4% for the current year and 1.1% for the next year.
Favorable Valuation: The company seems to be trading at a discount with respect to its price/book (P/B) and price/earnings (P/E) (F1) ratios. Currently, it has a P/B ratio of 0.65, which is below the industry average of 0.77. Likewise, its P/E (F1) ratio of 11.30 is lower than the industry average of 12.31.
Also, the stock has a Value Score of B. Our research shows that stocks with a Value Score of A