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Truist Financial (TFC)
NYSE:TFC
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Truist Financial
(NYSE:TFC)57Neutral
Positive Factors
Capital Markets
Capital Markets was a bright spot with revenue increasing by a significant percentage, positioning IB & Trading fees as leaders of fee income growth.
Operating Leverage
The stock reacted positively to the positive operating leverage guide driven by disciplined expense management.
Negative Factors
Guidance
TFC's guidance for 4Q24 includes a revenue decrease of 1.5% and an expense increase of 4% sequentially, along with a higher tax rate.
Loan Growth
Truist is more dependent on traditional banking for earnings at a time when loan growth is weak, especially on the corporate side.
Truist Financial (TFC) vs. S&P 500 (SPY)
Market Cap
$60.50B
Dividend Yield4.58%
Average Volume (3M)7.07M
Price to Earnings (P/E)13.8
Beta (1Y)1.26
Revenue Growth-26.77%
EPS GrowthN/A
CountryUS
Employees50,832
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)3.33
Shares Outstanding1,305,350,700
10 Day Avg. Volume6,358,428
30 Day Avg. Volume7,072,256
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.72
Price to Cash Flow (P/CF)19.50
P/FCF Ratio5.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$52.27Price Target Upside19.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Truist Financial Business Overview & Revenue Model
Company DescriptionTruist Financial Corporation is a leading financial services company headquartered in Charlotte, North Carolina. Formed through the merger of BB&T and SunTrust Banks in 2019, Truist provides a wide range of banking and financial services, including retail, small business and commercial banking, asset management, mortgage, insurance, and wealth management services. The company operates primarily in the Southeastern and Mid-Atlantic regions of the United States, serving millions of customers with a comprehensive suite of financial products and services.
How the Company Makes MoneyTruist Financial Corporation makes money through a diversified revenue model that includes several key streams. The primary source of income is through interest income, which is earned from loans and advances made to individuals, businesses, and other entities. Additionally, the company generates revenue from non-interest income sources such as fees and commissions from asset management, investment banking, insurance services, and transaction-based services. Truist also earns money from wealth management services, providing financial advisory and investment solutions to high-net-worth individuals. The company benefits from strategic partnerships and a strong regional presence, which enhances its ability to cross-sell products and services, thereby driving additional revenue. Economic factors, interest rate environments, and regulatory changes also play significant roles in influencing Truist's earnings.
Truist Financial Financial Statement Overview
Summary
Truist Financial's financial health shows mixed signals. Revenue and net income have shown some recovery, but operational inefficiencies and high leverage pose challenges. The company maintains a stable cash flow but needs to improve operational margins and manage debt levels for enhanced resilience.Income Statement
The income statement reflects volatility with a notable turnaround in net income for 2024 after a negative figure in 2023. Revenue growth has been positive, with a 3.69% increase from 2023 to 2024. However, negative EBIT and EBITDA margins in recent periods raise concerns about operational efficiency.45
Neutral
Balance Sheet
The balance sheet portrays a stable equity base with a slight increase in stockholders' equity. The debt-to-equity ratio remains relatively high at approximately 1.01, signaling significant leverage. The equity ratio is around 12%, indicating moderate financial stability but potential vulnerability to debt-related risks.60
Neutral
Cash Flow
Cash flow analysis shows a decline in operating cash flow in 2024 but a positive free cash flow, which suggests ongoing cash generation capability. The free cash flow to net income ratio is strong, reflecting efficient cash utilization relative to profitability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 25.07B | 23.39B | 22.26B | 23.11B | 20.37B | Gross Profit |
| 813.00M | 23.39B | 22.26B | 23.11B | 20.37B | EBIT |
| -481.00M | -185.00M | 8.91B | 9.53B | 7.14B | EBITDA |
| -481.00M | 1.03B | 9.04B | 9.38B | 0.00 | Net Income Common Stockholders |
| 4.82B | -1.09B | 6.26B | 6.44B | 4.48B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.55B | 33.40B | 93.22B | 173.42B | 139.66B | Total Assets |
| 531.18B | 535.35B | 555.25B | 541.24B | 509.23B | Total Debt |
| 64.16B | 62.12B | 66.63B | 41.20B | 45.69B | Net Debt |
| 64.16B | 31.48B | 45.20B | 20.91B | 26.82B | Total Liabilities |
| 467.50B | 476.10B | 494.72B | 471.97B | 438.32B | Stockholders Equity |
| 63.68B | 59.10B | 60.51B | 69.27B | 70.81B |
| Cash Flow | Free Cash Flow | |||
| 2.16B | 8.63B | 10.52B | 7.45B | 6.62B | Operating Cash Flow |
| 2.16B | 8.63B | 11.08B | 7.89B | 7.44B | Investing Cash Flow |
| 18.60B | 22.86B | -29.97B | -32.06B | -43.65B | Financing Cash Flow |
| -11.64B | -22.27B | 20.02B | 25.59B | 36.02B |
Truist Financial Technical Analysis
Negative
43.76
Price Trends
45.24
Negative
44.81
Negative
42.18
Positive
Market Momentum
-0.22
Positive
36.78
Neutral
30.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TFC, the sentiment is Negative. The current price of 43.76 is below the 20-day moving average (MA) of 46.27, below the 50-day MA of 45.24, and above the 200-day MA of 42.18, indicating a neutral trend. The MACD of -0.22 indicates Positive momentum. The RSI at 36.78 is Neutral, neither overbought nor oversold. The STOCH value of 30.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TFC.
Truist Financial Risk Analysis
Truist Financial disclosed 49 risk factors in its most recent earnings report. Truist Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Truist Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $699.73B | 12.67 | 16.96% | 1.84% | 17.07% | 21.78% | |
74 Outperform | $241.02B | 13.66 | 11.01% | 2.01% | 7.87% | 11.69% | |
72 Outperform | $324.49B | 13.28 | 9.18% | 2.19% | 13.06% | 4.94% | |
71 Outperform | $75.95B | 13.97 | 10.82% | 3.35% | 7.24% | 7.51% | |
70 Neutral | $69.59B | 11.78 | 10.75% | 4.28% | 5.59% | 15.52% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
57 Neutral | $60.50B | 13.81 | 7.57% | 4.58% | -26.77% | ― |
* Financial Sector Average
Performance Comparison
TFC
Truist Financial
43.76
8.44
23.90%
BAC
Bank of America
42.67
7.92
22.79%
JPM
JPMorgan Chase & Co.
250.25
65.91
35.75%
PNC
PNC Financial
180.45
30.85
20.62%
USB
US Bancorp
44.61
3.27
7.91%
WFC
Wells Fargo
73.30
18.04
32.65%
Truist Financial Earnings Call Summary
Earnings Call Date: Jan 17, 2025 | % Change Since: -1.62% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with strong capital positions, growth in investment banking, and digital adoption, despite challenges with narrow margins, revenue pressures, and increased expenses.Highlights
Strong Capital Position and Returns
Truist's CET1 capital ratio finished the year at 11.5%, up 140 basis points versus 2023. Returned $3.8 billion to shareholders through dividends and share repurchases.
Investment Banking and Trading Growth
Investment banking and trading revenue increased 46% for the year compared to 2023, marking the strongest performance since 2021.
Positive Deposit Trends
Average deposit balances increased by 1.5% sequentially, with noninterest-bearing deposits up 1.8%.
Consistent Asset Quality
Nonperforming loans held for investment declined $38 million linked quarter. Net charge-offs increased slightly but were in line with expectations.
Digital Adoption and Client Growth
Digital users grew to over 7.1 million, with digital transactions up 13% year-over-year. 275,000 new-to-bank clients acquired through digital channels, a significant increase from the previous year.
Lowlights
Narrow Margins and Revenue Challenges
Total revenue decreased 0.5% linked quarter, with net interest margin decreasing by 5 basis points to 3.07%.
Pressure on Noninterest Income
Noninterest income decreased by $12 million or 0.9% from the previous quarter, due to lower investment banking and trading activity.
Increased Operating Expenses
Adjusted expenses grew 4% linked quarter due to higher professional fees and outside processing expenses.
Company Guidance
During the Truist Financial Corporation Fourth Quarter 2024 Earnings Call, the management team, including Chairman and CEO William Rogers and CFO Michael Maguire, provided guidance for 2025. They reported a fourth-quarter net income of $1.2 billion and an annual GAAP net income of $4.5 billion. The company expects revenue to grow by 3% to 3.5% in 2025, driven by low single-digit end-of-period loan growth and modest increases in both net interest income and noninterest income. They anticipate an adjusted expense increase of approximately 1.5%, aiming for positive operating leverage of 150 to 200 basis points. Truist plans to continue its $500 million share repurchase program in the first quarter of 2025, supported by a CET1 capital ratio of 11.5%. The company is focused on maintaining strong credit metrics, with an expected net charge-off rate of around 60 basis points for the year. Key growth areas include expanding client relationships, particularly in premier banking, wealth, and payments, while also enhancing their digital platforms and investing in technology and risk infrastructure.Truist Financial Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Truist Financial COO Resignation Impacts Leadership Structure
Negative
Jan 13, 2025
Hugh S. ‘Beau’ Cummins III, Vice Chair and COO of Truist Financial, has resigned due to significant changes in his responsibilities following strategic initiatives he played a key role in, such as the sale of Truist Insurance Holdings. His resignation for ‘Good Reason’ entitles him to specific benefits, and his responsibilities will transition to other senior executives, impacting the company’s operational leadership.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.