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On Monday, Stephens analyst Terry McEvoy adjusted the price target for Truist Financial (NYSE:TFC) shares, lowering it to $46 from the previous $48, while maintaining an Overweight rating. Currently trading at $35.90, the stock has declined over 16% year-to-date. This move follows Truist Financial’s first-quarter earnings report for 2025, which revealed an operating earnings per share (Op. EPS) of $0.89, outpacing the consensus by $0.03, and an operating pre-provision net revenue (Op. PPNR) that exceeded consensus expectations by 2.6%. The better-than-expected results were attributed to higher fee income and improved expense management. According to InvestingPro, analysts expect sales growth in the current year, despite recent challenges.
The bank experienced a 1.1% quarter-over-quarter loan growth, driven by commercial and industrial (C&I), indirect auto, and mortgage loans. Despite this growth, average deposits would have remained flat if not for two large, short-term client deposits. Truist’s management has updated its 2025 outlook, now forecasting 50-150 basis points of positive operating leverage, a revision from the 150-200 basis points discussed in January. The change reflects expectations of lower fixed-rate asset repricing, flat year-over-year investment banking revenue, and challenges in wealth management income.
The revised outlook prompted late-quarter model adjustments by Stephens, leading to a slight decrease of around 1% in their 2025 earnings estimate for Truist Financial. However, this was partially offset by an anticipated increase in buyback activity, with a projection of $750 million in repurchases per quarter. McEvoy highlighted potential benefits from strategic initiatives such as Premier Banking, as well as investments in Capital Markets and Payments, which could provide an upside. Additionally, the possibility of incremental capital return and improved visibility in organic loan and deposit growth underpin the Overweight rating.
In summary, while the price target for Truist Financial stock has been lowered to $46, Stephens maintains a positive outlook due to various factors, including strategic initiatives and potential for increased capital return, which could drive future performance. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of Truist Financial among 1,400+ top US stocks.
In other recent news, Truist Financial Corp reported its Q1 2025 earnings, slightly surpassing analyst expectations with an earnings per share (EPS) of $0.87 against the forecast of $0.86. The company’s revenue remained steady at $4.95 billion, meeting market expectations. Truist’s net income for the quarter was $1.2 billion, with a notable 1.1% increase in average loans and a $2.2 billion rise in average deposits. Despite these positive results, the net interest margin decreased to 3.01%, reflecting ongoing interest rate pressures. Truist has also enhanced its digital capabilities, resulting in significant new account openings, particularly among millennials and Gen Z. The company plans to target up to $750 million in share buybacks in Q2 2025. In analyst updates, Truist Financial’s stock was not subject to any recent upgrades or downgrades. These developments highlight Truist’s strategic focus on digital growth and operational efficiency amidst a challenging economic landscape.
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