Truist sees value in mid-sized bank stocks ahead of earnings

Investing.com - Truist Securities highlights investment opportunities in small and mid-sized bank stocks as the sector faces pressure from macroeconomic concerns and yield curve volatility.

Bank stocks have declined in recent weeks due to macro concerns, yield curve movements, and cash sorting activity, according to a Truist research note. The firm says fundamental outlooks remain stable, with earnings revisions trending positively year-to-date.

Small and mid-sized banks trade at a high single-digit price-to-earnings discount compared to large banks. The group also trades approximately three turns below historical valuation levels.

Truist identifies Pinnacle Financial Partners (NASDAQ: PNFP) and Wintrust Financial (NASDAQ: WTFC) as preferred stocks within its small and mid-sized bank coverage. The firm released its analysis ahead of third-quarter earnings results for the sector.

The research note examines key issues facing Truist's small and mid-sized bank coverage heading into the quarterly reporting period.

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