Stephens lowers Truist Financial stock price target on earnings outlook
Stephens has revised its price target for Truist Financial to $54, down from $55, while keeping an Overweight rating. This adjustment comes after reviewing Truist's Q3 earnings, which beat analyst expectations. Operating earnings per share came in at $1.16, outpacing Stephens' forecast of $1.13 and the consensus estimate of $1.12. However, pre-provision net revenue aligned with market projections.
The stock is currently trading at $46.32 with a P/E ratio of 12.0, and InvestingPro analysis suggests it may be slightly undervalued. The quarter marked the first earnings participation for Truist's new CEO, Mike Lyons. Lyons has pledged to achieve a 15% return on tangible common equity by 2027, with a longer-term goal of 16%-18%.
Truist maintains a strong dividend record, having paid dividends for 54 consecutive years, offering a 4.49% yield. The company intends to reduce its balance sheet by exiting the RAC and Lightstream consumer businesses, which should improve funding and reposition available-for-sale assets in the coming quarters.
Stephens has raised its forecast for 2027 operating earnings per share to $4.97 from $4.98. The firm will provide more details on achieving the targeted 16%-18% return on tangible common equity with the fourth-quarter results in January.
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