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Charlotte, North Carolina-based Truist Financial Corporation (TFC) is a financial services company that provides banking and trust services to consumers and commercial clients. Valued at a market cap of $51.7 billion, the company offers a comprehensive range of financial services, including consumer and small business banking, commercial banking, corporate and investment banking, wealth management, payments, and specialized lending.
This financial services provider has lagged behind the broader market over the past 52 weeks. Shares of TFC have gained 2.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 12.3%. Moreover, on a YTD basis, the stock is down 9%, compared to SPX’s 3.3% loss.
Narrowing the focus, TFC’s underperformance looks pronounced when compared to the SPDR S&P Regional Banking ETF’s (KRE) 14.7% rise over the past 52 weeks and 6.8% downtick on a YTD basis.
On Apr. 17, shares of TFC closed down marginally after delivering its Q1 results. The company’s revenue improved 1.6% year-over-year to $4.9 billion, with tax-equivalent net interest income up 3.8%, reaching $3.6 billion, supported by lower interest expenses. Furthermore, a decline in provisions and higher average deposit balances acted as tailwinds. Its adjusted earnings of $0.87 per share declined 3.3% from the year-ago quarter but came 1.2% above Wall Street’s estimates.
However, on the downside, its non-interest income fell 3.7% annually, while its adjusted efficiency ratio worsened to 56.4%. Credit quality showed mixed trends. While its net charge-offs and provision for credit losses declined from the year-ago quarter, its allowance for loan and lease losses and total non-performing assets (NPAs) increased year-over-year. These headwinds might have raised investor concerns and overshadowed the positives.
For fiscal 2025, ending in December, analysts expect TFC’s EPS to grow 6.2% year over year to $3.92. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.
Among the 21 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on nine “Strong Buy,” two “Moderate Buy,” and 10 “Hold” ratings.
This configuration is slightly more bullish than two months ago, with eight analysts suggesting a “Strong Buy” rating, and three analysts advising a “Moderate Buy.”
On Apr. 29, Vivek Juneja from JPMorgan Chase & Co. (JPM) maintained a “Hold” rating on TFC with a price target of $40.50, which indicates a 2.6% potential upside from the current levels.
The mean price target of $45.87 represents a 16.2% premium from TFC’s current price levels, while the Street-high price target of $56 suggests a notable upside potential of 41.9%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
