WTFC - Pinnacle Financial Partners: Time For A Downgrade After A Great Run Higher

2024-04-20 15:46:26 ET

Summary

• Pinnacle Financial Partners has seen strong growth and stability, but it may be time to pull back and downgrade to a 'hold'.
• The company's balance sheet shows remarkable growth in deposits and loans, but uninsured deposit exposure is slightly higher than preferred.
• While net interest income and non-interest income have increased, overall profits have only inched up, and the stock is not attractively priced relative to earnings.

From my experience, it's always better to lock in a solid gain than to continue clinging on to an investment with the hopes of just a little more profit. This is a hard habit to break and one that I still fall prey to every so often. But one firm that I do believe now makes sense to pull back from is a fairly small financial institution by the name of Pinnacle Financial Partners ( PNFP ). In July of 2023, as many of the banks that are out there faced downward pressure because of the banking crisis that began in March of that year, I identified Pinnacle Financial Partners as an attractive opportunity. I ultimately rated the business a 'buy' because of how shares were priced and because of the stability that the company exhibited....

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