Goldman Sachs upgraded PNC (PNC) to Buy from Neutral and added the stock to its Conviction List, saying that the bank can benefit more from interest rate hikes than the market believes.

CATALYSTS: With upcoming rate hikes likely to cause PNC's deposits and balance sheet to grow, the bank is "an underappreciated rate opportunity," wrote Goldman analyst Richard Ramsden. PNC's net interest income will probably grow 6% this year, versus the consensus estimate of 3%, as its loan growth is poised to beat expectations, Ramsden believes. Given PNC's concentration in "rust belt" states and its focus on commercial and industrial loans, the bank could benefit from an economic upturn in the region, added the analyst. Finally, Ramsden wrote that PNC has a strong track record of keeping its costs down, inspiring confidence that any revenue growth will reach its bottom line.

TARGET: Ramsden raised his price target on PNC to $143 from $121. 

PRICE ACTION: In late morning trading, PNC was little changed at $121.82 per share. Since Nov. 9, 2016, the day after the presidential election, PNC shares have advanced about 26% amid broad strength in the financial sector.