Pinnacle Financial Partners Inc (PNFP.K): 2Q26 Initial Take - Softer PPNR Result, 2026 Guidance Narrowed

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Pinnacle Financial Partners Inc (PNFP.K): 2Q26 Initial Take - Softer PPNR Result, 2026 Guidance Narrowed

Pinnacle Financial Partners Inc (PNFP.K)

23 July 2026 Citi Research

Pinnacle Financial Partners Inc

Valuation

Our $126 target price for PNFP is derived from our discounted residual income model, which values an enterprise based on its

discounted excess returns over its cost of equity. Our residual income model incorporates our 3-year forward earnings

projection followed by a 7-year fade period to our normalized ROTE estimate of 16.5%. The key inputs to our 12.2% cost of

equity are a risk-free rate of 4.5%, ERP of 3.5%, and a beta of 2.2. We assume a 5.0% long-term growth rate.

Risks

Key macroeconomic risk to PNFP is the Fed is unable to achieve a “soft landing”, which could lead to increased credit risk.

While we do not expect significant losses, if credit conditions deteriorate beyond our expectations, it may impose significant

headwinds to earnings and achieving our target price.

Company-Specific Positive Risks: For PNFP, we find the stronger-than-peer economic growth profile to position the bank well

for above-average growth potential. Additionally, overall loan growth and improving loan yields have consistently generated an

improving NII revenue trend. Should national economic trends continue to perform well, PNFP’s LLP expenses are likely to be

lower than current consensus expectations, supportive of future upside to consensus estimates.

Company-Specific Negative Risks: PNFP has a unique concentration of commercially focused clients throughout the

southeastern United States, which has seen a rapid uptick in CRE volume. While we believe management has proven to be