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Investing.com - Keefe, Bruyette & Woods raised its price target on Truist Financial (NYSE:TFC) to $49.00 from $48.00 while maintaining a Market Perform rating.
The price target increase follows Truist’s detailed explanation of its path toward achieving approximately 15% Return on Tangible Common Equity (ROTCE) by 2027, which KBW cited as the primary driver behind the stock’s 3.5% rally. The bank’s strong fundamentals are reflected in its 53-year streak of consecutive dividend payments, currently yielding 4.9%.
KBW noted that Truist’s quarterly earnings upside was supported by better pre-provision net revenue and lower credit costs, though the firm attributes the positive market reaction more to management’s clarity on medium-term ROTCE goals.
The research firm stated that the ROTCE improvement narrative represents a significant piece of Truist’s investment case, with the bank planning to achieve its targets through faster revenue growth, positive operating leverage, and greater share buybacks.
KBW believes that as the market gains more confidence in the timing of these improvements, Truist’s current 15% price-to-tangible book value discount compared to peers could begin to narrow.
In other recent news, Truist Financial Corporation reported its third-quarter earnings for 2025, with a net income of $1.3 billion, translating to $1.04 per share. Despite this performance, the company missed the expected earnings per share (EPS) forecast of $0.99, resulting in an EPS surprise of -8.08%. Meanwhile, Morgan Stanley adjusted its price target for Truist Financial, raising it to $55 from $54, while maintaining an Equalweight rating. The bank’s net interest income fell approximately 1% below consensus estimates due to a softer net interest margin, which declined by 4 basis points. However, Morgan Stanley highlighted that loan growth is improving, with expectations for the net interest margin to rebound in the fourth quarter and beyond as interest rate cuts continue. These developments provide insights into the company’s recent financial performance and analyst expectations.
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