Baird Upgrades Truist Financial (TFC) to Outperform

Baird analyst David George upgraded Truist Financial (NYSE: TFC) from Neutral to Outperform with a price target of $52.00 (from $48.00).

The analyst comments: "TFC currently trades at a market/cap assets of ~10.8%, a ~16% discount to its post-crisis median and ~1.45x TBV (~1.2x TBV Ex-OCI), a ~25% discount to its post-crisis median (~35% discount Ex-OCI) and ~15% below the large-cap median. Given the consensus NTM earnings outlook and current TCE levels, we believe Truist should trade closer to ~1.45x TBV (ex-OCI) and ~1.75x TBV including the current OCI marks.

TFC's ~11.5% CET1 ratio (vs. ~10% LT target) should provide plenty of capital flexibility, as the bank should be able to fund loan growth
while still executing buybacks near ~$500M per quarter. The current excess capital levels reflect ~11% of TFC's current market-cap. Further securities repositionings are unlikely following the TIH sale, but the bank could execute if presented a reasonable opportunity.
TFC's excess capital position will also allow the bank to take advantage when loan demand eventually improves and play more "offense" with respect to growth, especially in higher RWA businesses like trading."

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 $43.76 yesterday.

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