Pinnacle (NDAQ: PNFP) is set to report quarterly earnings tomorrow of $2.03 on revenue of $430m. A positive report may provide the momentum investors seek.

Overview

Pinnacle Financial Partners is an American bank which has its main office in Nashville, Tennessee, and it also has operations in North Carolina, South Carolina, Virginia, Georgia, and Alabama in addition to Tennessee. Twelve businessmen from Nashville who wanted to establish a locally owned financial institution started the company on February 20, 2000. The business was listed on the NASDAQ with the ticker PNFP in May 2002. Based on a satisfaction survey of employees, Fortune magazine named Pinnacle Financial Partners at number 14 on its Fortune List of the Top 100 Companies to Work For in 2020.

Financials

The company reported $1.4bn in revenue and $1.3bn in gross profit in the year ending December 2021. After all operating expenses and tax, net income came in at $512m, which was a $208m rise YoY. This was due to an increase in revenue and a reduction in expenses compared to the prior fiscal year. As a result, in 2021 Pinnacle’s earnings per share were reported at $6.79, a 68% growth year-on-year. Looking at the balance sheet, its cash on hand remains strong with a total value of $4.1bn, and total assets rose by $3.5bn whereas total liabilities rose by $3.1bn YoY. Consequently, the total equity of the company grew to $5.3bn from $4.9bn.

Technicals

From a technical outlook, the stock’s price currently sits around $75.02 a share. Applying the Fibonacci retracement to the chart, a key support level sits at $66.86 (0% Fib). A break below this point could see the price of the stock slide towards the $60 region. Towards the upside, resistance sits at $77.45 (23.6% Fib) then at $84.01 (38.2%) then at $89.31 (50% Fib). The 50% Fib has been a tough resistance point for this stock in 2022, hence, some positive news alongside strong momentum could re-test this in the first quarter of 2023. A break above the 50% Fib would see the next resistance test at $94.61 (61.8% Fib). Looking at the technical indicators, MACD is slightly negative but drifting towards a neutral stance and so is RSI as it reads 43, just below a neutral indication.

Summary

Overall, the company’s financials are solid with the demonstration above of regular growth year-on-year. Revenue and profit continue to rise and cash-on-hand is well maintained to ensure some security. Also, the ratio of total assets to total liabilities is positively creating balanced financial stability within the business. Based on the technicals, the stock has tumbled slightly since the start of last year, but in Q4 of 2022, it reached a key resistance point before re-testing the major support level below. Support seems to be established and even though the indicators are suggesting a negative stance at present, they are leaning towards a neutral stance. Pinnacle is set to report its quarterly earnings tomorrow, therefore, a positive report could provide the bullish momentum that investors are seeking.