Truist Financial Q2 Earnings Surpass Expectations

American bank holding company Truist Financial (TFC) has reported better-than-expected Q2 results on the back of strong investment banking performance and release of reserves.

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Adjusted earnings stood at $1.55 per share, beating the Street’s estimates of $1.17. Total revenue decreased 3.8% year-over-year to $5.65 billion, surpassing analysts’ expectations of $5.47 billion.

Net interest income fell 5.9% to $3.27 billion on 25 basis points contraction in net interest margin. Noninterest income declined marginally to $2.41 billion. Lower residential mortgage income was partly offset due to the rise in investment banking and trading income.

Provision for credit losses was a negative $434 million for the second quarter on improvement in the economic outlook and lower loan balances. (See Truist stock chart on TipRanks)

Chairman and CEO of Truist Kelly S. King said, “Given our progress towards a successful conversion, an improving economic outlook, and successful CCAR results, we plan to lower our near-term CET1 target to approximately 9.75%, giving us additional capacity to deploy incremental capital on behalf of our clients and shareholders.”

Following the results, Raymond James analyst Michael Rose assigned a Hold rating to the stock.

Rose noted, “Looking ahead, our EPS estimates move higher to reflect this quarter’s upside, a reduction in our NCO/provision forecasts, and a stronger revenue outlook (net interest income from a larger balance sheet but lower NIM and fee income from stronger insurance and CRE-related income).”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 3 Buys, 3 Holds and 1 Sell. The average Truist price target of $63.83 implies 14.3% upside potential from current levels.

TipRanks data shows that financial blogger opinions are 100% Bullish on TFC, compared to the sector average of 70%.