(Recasts; adds details, share movement) Dec 2 (Reuters) - Veteran banking analyst Richard Bove slashed his price target on the shares of PNC Financial Services Group Inc (PNC.N) and said the bank could see higher charge-offs and reserve requirements in 2009 from its merger with National City Corp NCC.N.
The Ladenburg Thalmann analyst, who cut his price target on the stock by 35 percent to $50, also said that BlackRock Inc’s (BLK.N) earnings may drag PNC’s results until there is some stability in the markets.
PNC owns about one-third of BlackRock, the largest publicly traded U.S. asset manager.
“In 2009, the key earnings drivers (for PNC) would appear to be positive growth in net interest income and controlled expenses versus much higher loan loss provisions and lower non-interest income,” said Bove, who lowered his 2009 profit view for the bank to $4.44 a share from $4.96.
However, the elimination of National City as a competitor is likely to lower deposit costs and increase PNC’s presence in the markets, Bove said. He kept a “buy” rating on the stock.
Shares of PNC, which have fallen 33 percent in the last month, were down $1.41 at $42.86 Tuesday morning on the New York Stock Exchange. (Reporting by Amiteshwar Singh in Bangalore; Editing by Himani Sarkar)