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With a market cap of $56.3 billion, Truist Financial Corporation (TFC) is a leading financial services company, based in Charlotte, North Carolina. The company offers a broad range of services, including retail, corporate, and investment banking, as well as insurance brokerage and wealth management.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Truist Financial fits this criterion perfectly. Truist Financial's uniqueness in the market lies in its integration of innovative digital banking with a comprehensive insurance division, offering diversified financial services that cater to both retail and commercial clients, backed by a significant presence across 15 states.
However, the bank holding company has dropped 7.2% from its 52-week high of $45.31, achieved in July. Despite this pullback, shares of TFC are up 15.5% over the past three months, outperforming the broader S&P 500 Index's ($SPX) 1% gain over the same time frame.
Over a longer term, TFC has gained 13.9% on a YTD basis, closely matching SPX's 13.4% gains. Shares of Truist Financial have surged 41.5% over the past 52 weeks, significantly outpacing SPX's 21.1% returns over the same time frame.
To confirm the bullish price trend, TFC has been trading above its 200-day moving average since December last year. Also, it has stayed above its 50-day moving average since July, despite some fluctuations earlier this year.
Truist Financial has outperformed primarily due to the sale of its insurance unit, which boosted liquidity and capital ratios, improved operational efficiency, and its resilience through strong loan performance and steady deposit levels.
Moreover, the stock rose 3.2% on Jul. 22 after reporting better-than-expected Q2 adjusted EPS of $0.91, bolstered by a strategic insurance sale and a $5 billion stock buyback plan. Additionally, the company reported a 4.5% increase in net interest income (NII) quarter-over-quarter, driven by the balance sheet repositioning, which positively impacted investor sentiment despite a significant drop in noninterest income.
In contrast, its rival Bank of America Corporation (BAC) has underperformed TFC, with a 52-week gain of 36.5%. However, TFC has slightly lagged behind BAC's 15.1% rise on a YTD basis.
Despite Truist Financial's outperformance over the past year, analysts are cautiously bullish about its prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts in coverage, and the mean price target of $46.90 is a premium of 11.5% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
