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UPDATE: Evercore ISI Downgrades Truist Financial (TFC) to In Line

October 19, 2022 3:08 AM EDT
Get Alerts TFC Hot Sheet
Price: $49.28 -1.5%

Rating Summary:
    4 Buy, 12 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 28 | New: 29
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(Updated - October 19, 2022 4:39 AM EDT)

Evercore ISI analyst John Pancari downgraded Truist Financial (NYSE: TFC) from Outperform to In Line with a price target of $47.00 (from $54.00).

The analyst comments "Downgrading to In Line: Material operating leverage could prove elusive & limit upside to shares. We are downgrading TFC to In Line from Outperform post 3Q results as we expect mounting funding pressures and ongoing business investment to weigh on operating leverage visibility in 2023. This uncertainty, combined with select fee headwinds, could limit material incremental upside to the shares in our view. While our updated earnings forecast for TFC still includes an above peer 25% ROTCE in 2023/24, we believe this outlook is fairly discounted in the stock’s premium P/TBV valuation (2.4x TBV vs 1.9x at peers). On an earnings basis, TFC trades at 8.5x our updated 2023 estimate – essentially in line with peers. That said, with ~4% projected EPS growth in 2023/24 and 1-2% avg earning asset growth, we believe TFC’s in line multiple is fair (peers HSD EPS growth in 2023 & 4% 2024; ~3% TBV growth). At this time, we see greater valuation upside at
banks with more compelling earnings and/or valuation catalysts. And accordingly, we move to In Line on the shares with a $47 target price."

For an analyst ratings summary and ratings history on Truist Financial click here. For more ratings news on Truist Financial click here.

Shares of Truist Financial closed at $43.37 yesterday.


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