Bank of America vs. PNC Financial: Which Bank Stock Has More Upside?

Bank of America BAC and PNC Financial Services PNC are two prominent U.S. banks with broad national reach. BAC leverages its massive scale and diversified financial services, while PNC is distinguished by its prudent growth strategy and targeted regional expansion. Both have distinct advantages amid an evolving interest rate and regulatory landscape.With Trump's crypto-friendly approach and the introduction of legislation favoring digital assets, Bank of America and PNC Financial are vying to capitalize on rising client interest in this space. So, let’s take a closer look at these two banks to see which offers stronger investment potential as digital assets become more integrated into the traditional financial system.The Case for Bank of AmericaBank of America is already laying the groundwork for a stablecoin, CEO Brian Moynihan revealed on the second-quarter earnings call. While client demand is still nascent, he noted the bank is prepared to move forward, likely in partnership, once adoption and timing align. “You’d expect our company to move on that,” he said.Additionally, BAC is prioritizing organic, domestic growth through the expansion of its physical and digital presence. This is part of a broader strategy to solidify customer relationships and tap into new markets, driving net interest income (NII) over time. By 2027, the company plans to expand its financial center network and open more than 150 centers. With growing use of tools like Zelle and AI assistant Erica, the company is boosting digital engagement and cross-selling products like mortgages, auto loans and credit cards.Also, Bank of America’s investment banking (IB) business is poised to rebound once macroeconomic and geopolitical uncertainties ease. During the first half of 2025, IB's performance was weak amid a challenging operating environment. Nonetheless, a strong IB pipeline positions the bank to benefit from a recovery in global deal-making activity.However, because of prolonged higher interest rates, BAC’s credit quality has weakened. As it remains vigilant about the effects of continuous high rates, the impact of tariffs on inflation and quantitative tightening on its loan portfolio, its asset quality is expected to remain subdued in the near term.The Case for PNC FinancialSimilar to BAC, PNC Financial is expanding into the lucrative digital assets space. In partnership with Coinbase COIN, the company aims to expand secure and innovative crypto solutions for both retail and institutional clients. The bank will provide select services to Coinbase while jointly developing regulated options that allow clients to buy, hold and sell cryptocurrencies via Coinbase’s Crypto-as-a-Service platform.Moreover, PNC has been strengthening its business through collaborations and acquisitions. In May 2025, it agreed to acquire Aqueduct Capital Group. In 2024, PNC partnered with Plaid to enable secure data sharing and expanded its TCW Group alliance to offer private credit to middle-market firms. Such efforts have helped diversify the company’s business mix, aiding its bottom line.Further, capitalizing on growth opportunities, in October 2023, it acquired loan commitments worth $16 billion from Signature Bank. A well-diversified deposit base is expected to strengthen its financial position. This, along with fixed asset repricing over the next couple of years, will support PNC’s NII growth.Like Bank of America, PNC Financial has announced plans to enhance its coast-to-coast branch network. Over the next five years, the company aims to invest $1.5 billion to open more than 200 new branches across 12 U.S. cities and renovate 1,400 existing locations.Nevertheless, an elevated expense base is a headwind despite the company's cost-containment measures. Further, the lack of diversification in the loan portfolio is concerning and may put pressure on PNC’s asset quality.BAC & PNC: Price Performance, Valuation & Other ComparisonsWhile 2025 started on a positive note, Trump’s tariff plans and geopolitical tension resulted in massive volatility, upending bullish investor sentiments. This year, shares of Bank of America and PNC Financial gained 9.8% and 0.6%, respectively. BAC & PNC YTD Price Performance Image Source: Zacks Investment ResearchFurther, BAC has outpaced the S&P 500 Index, while PNC Financial lagged. In terms of investor sentiments, Bank of America clearly has the edge.In terms of valuation, BAC is currently trading at a 12-month forward price-to-earnings (P/E) of 12.01X, while the PNC stock is currently trading at a 12-month forward P/E of 11.75X. P/E F12M Image Source: Zacks Investment ResearchFurther, both are trading at a discount compared with the industry average of 14.90X. So, Bank of America is expensive compared to PNC.After clearing the 2025 stress test, BAC and PNC announced a hike in their quarterly dividends. Bank of America increased its dividend by 8% to 28 cents per share, while PNC Financial announced a 6% rise in quarterly payout to $1.76 per share. At present, BAC's dividend yields 2.16%, which is less than PNC Financial’s 3.51%. Dividend Yield Image Source: Zacks Investment ResearchBank of America’s return on equity (ROE) of 10.25% is below PNC’s 11.07%. Further, the industry’s ROE is 13.88%. This reflects that PNC Financial is more efficiently using shareholder funds to generate profits.ROE Image Source: Zacks Investment ResearchBank of America & PNC Financial’s ProspectsThe Zacks Consensus Estimate for BAC’s 2025 and 2026 revenue implies year-over-year growth of 5.8% and 5.7%, respectively. The consensus estimate for earnings indicates a 11.9% and 16.3% rise for 2025 and 2026, respectively. BAC Earnings Estimate Image Source: Zacks Investment ResearchMeanwhile, the Zacks Consensus Estimate for PNC’s 2025 and 2026 revenue implies year-over-year growth of 6.2% and 5.8%, respectively. The consensus estimate for earnings indicates a 10.8% and 12.4% rise for 2025 and 2026, respectively.  PNC Earnings Estimate Image Source: Zacks Investment ResearchBAC or PNC: Which Bank Stock is a Smart Bet?Bank of America and PNC Financial offer compelling long-term investment cases, but their strengths cater to different investor profiles. BAC’s expansive scale, digital leadership and improving earnings outlook make it well-positioned to benefit from economic recovery and rising fintech integration.Meanwhile, PNC appeals to more conservative investors with its higher dividend yield, disciplined lending and focused regional growth. While both banks are adapting to the evolving digital and regulatory landscape, Bank of America’s broader diversification and stronger growth projections give it a slight edge for those seeking long-term capital appreciation.Currently, BAC and PNC carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report Coinbase Global, Inc. (COIN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks