Nucor earnings beat by $0.08, revenue fell short of estimates
On Tuesday, Keefe, Bruyette & Woods (KBW) updated its outlook on Truist Financial (NYSE:TFC), lifting the price target to $57 from the previous target of $55, while maintaining an Outperform rating on the bank's shares. The adjustment comes in the wake of Truist Financial's recent performance, which surpassed expectations.
The financial institution reported a robust quarter, with a $0.05 per share beat on pre-provision net revenue (PPNR), attributed to a combination of net interest income (NII) growth and reduced expenses. A notable aspect of the quarter's results was the 2% growth in non-interest bearing deposits, alongside an increase in yields and growth within the bond portfolio. InvestingPro analysis reveals that Truist has maintained dividend payments for an impressive 52 consecutive years, currently offering a 4.37% yield.
Despite capital markets revenues falling short of KBW's estimates, the firm remains optimistic about Truist Financial's prospects in this area. Analysts at KBW believe that current market conditions, together with the company's strategic capital deployment for growth, will create sustained momentum in the capital markets segment.
The bank's expense management was particularly impressive, with actual expenses coming in $0.02 below KBW's estimates. The analysts anticipate that the bank's projected 1.5% expense growth will lead to favorable revisions in future estimates. This effective cost control is a significant factor in KBW's confidence in the bank's continued performance.
The positive outlook is further supported by Truist Financial's trading metrics and financial ratios. The stock is currently trading below 10 times KBW's 2026 earnings estimate and appears undervalued according to InvestingPro Fair Value analysis. Moreover, the bank's capital levels and efficiency ratio, which is expected to be below 56% by 2026, are considered better than those of its peers. Based on these factors, KBW reiterated its Outperform rating, signaling continued support for Truist Financial's stock. Discover more insights and 8 additional ProTips for Truist Financial with a comprehensive Pro Research Report, available exclusively on InvestingPro.
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