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Truist Tops 3Q Earnings, Raymond James Sticks To Buy

Truist Financial’s 3Q adjusted earnings per share of $0.97 beat Street estimates of $0.88, reflecting strong performances in its investment banking, wealth management and insurance divisions.

Further, its earnings showed solid improvement sequentially, thanks to the quarter-on-quarter decline in the provision for credit losses and reduction in operating expenses. Truist Financial’s (TFC) 3Q non-interest expenses and provisions for credit losses decreased 3.2% and 50.1%, respectively, on a sequential basis.

The company’s revenues declined 5.1% to $5.60 billion from the previous quarter. However, quarterly revenues surpassed analysts’ expectations of $5.39 billion.

"We are pleased to report strong performance for the quarter, particularly given the challenging environment," said Truist CEO Kelly S. King. "Our earnings reflect a modest build in our allowance for loan and lease losses, benefiting from our relatively stable asset quality. We also benefited from our diverse noninterest-income generating businesses and disciplined core expense control.” (See TFC stock analysis on TipRanks).

Following its quarterly results, Raymond James analyst Michael Rose raised the stock’s price target by $1 to $46 (9.2% upside potential) and reiterated a Buy rating. In a note investors, Rose wrote, “we continue to view risk-reward positively where we expect its evolving financial performance to improve vs. peers as cost savings from the MOE (Merger Of Equals) are realized, which in our view would translate to best in class financial/profitability metrics.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 7 Buys versus 2 Holds. With shares down over 25% year-to-date, the average price target of $46.39 implies upside potential of 10.2% at current levels.

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