Truist Financial Corporation (TFC) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Truist Financial Corporation (NYSE: TFC) stock fell -1.35% on Friday to $49.62 against a previous-day closing price of $50.30. With 4.1 million shares changed hands, the volume of the stock remained lighter than its average volume of 7.05 million shares. During the session, the Banks – Regional company that operates in wider Financial sector, reached to the highest price of $50.42 whereas the lowest price it dropped to was $49.46. The 52-week range on TFC shows that it touched its highest point at $68.95 and its lowest point at $44.68 during that stretch. It currently has a 1-year price target of $56.28. With its current market cap of 64.62 billion, TFC has annualized dividend of $2.08 while the current yield stands at 4.19%. Beta for the stock currently stands at 1.12.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TFC was up-trending over the past week, with a rise of 2.37%, but this was up by 2.95% over a month. Three-month performance surged to 1.39% while six-month performance fell -21.01%. The stock lost -8.35% in the past year, while it has lost -15.25% so far this year. A look at the trailing 12-month EPS for TFC yields 4.41 with Next year EPS estimates of 5.44. For the next quarter, that number is 1.26. This implies an EPS growth rate of 45.10% for this year and 7.93% for next year. EPS is expected to grow by 2.75% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 10.00%.

Float and Shares Shorts:

At present, 1.33 billion TFC shares are outstanding with a float of 1.32 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 12.12 million, which was 0.91% higher than short shares on Jun 14, 2022. In addition to Mr. William Henry Rogers Jr. as the firm’s Exec. Chairman, CEO & Pres, Mr. Daryl N. Bible serves as its Sr. EVP & CFO.

Institutional Ownership:

Through their ownership of 75.84% of TFC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 41.26% of TFC, in contrast to 34.24% held by mutual funds. Shares owned by individuals account for 0.30%. As the largest shareholder in TFC with 8.45% of the stake, The Vanguard Group, Inc. holds 112,494,516 shares worth 112,494,516. A second-largest stockholder of TFC, BlackRock Fund Advisors, holds 65,352,110 shares, controlling over 4.91% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in TFC, holding 63,207,501 shares or 4.75% stake. With a 2.95% stake in TFC, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 39,247,348 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.21% of TFC stock, is the second-largest Mutual Fund holder. It holds 29,471,228 shares valued at 1.4 billion. American Mutual Fund holds 1.09% of the stake in TFC, owning 14,502,675 shares worth 687.86 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. It generated $1.53B net income for the quarter, which came to $6.25B over the last twelve months.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TFC since 26 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 12 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TFC analysts setting a high price target of $70.00 and a low target of $41.00, the average target price over the next 12 months is $56.29. Based on these targets, TFC could surge 41.07% to reach the target high and fall by -17.37% to reach the target low. Reaching the average price target will result in a growth of 13.44% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TFC will report FY 2022 earnings on 01/18/2023. Analysts have provided yearly estimates in a range of $4.70 being high and $4.43 being low. For TFC, this leads to a yearly average estimate of $4.56. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Truist Financial Corporation surprised analysts by $0.02 when it reported $1.09 EPS against a consensus estimate of $1.07. The surprise factor in the prior quarter was $0.06. Based on analyst estimates, the high estimate for the next quarter is $1.31 and the low estimate is $1.10. The average estimate for the next quarter is thus $1.20.

Summary of Insider Activity:

Insiders traded TFC stock several times over the past three months with 2 Buys and 2 Sells. In these transactions, 20,132 shares were bought while 50,400 shares were sold. The number of buy transactions has increased to 68 while that of sell transactions has risen to 44 over the past year. The total number of shares bought during that period was 909,700 while 692,227 shares were sold.

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