Truist Financial (NYSE:TFC) shares are ticking marginally lower today after the financial services major reported mixed first-quarter numbers and issued a lackluster financial outlook. With a year-over-year decline of almost 9%, Truist Financial reported revenue of $4.87 billion, which fell short of expectations by $830 million. Conversely, its EPS of $0.90 outperformed estimates by $0.12.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
High Funding Costs Bite Truist
During the quarter, Truist’s net interest income (NII) declined by 12.6% owing to lower earning assets and higher funding costs. Concurrently, its net interest margin contracted by 28 basis points (YoY). On the other hand, the company’s noninterest income increased to $1.45 billion from $1.42 billion a year ago on the back of higher investment banking and trading income.
Tepid Loan Demand
Sequentially, the quarter was marked by a 1.3% decline in Truist’s average loans and leases, attributed to declines in its consumer, commercial, and industrial portfolios. Additionally, there was a 1.6% drop in its average deposits, owing to declines in its non-interest-bearing, money market, and savings deposits. Simultaneously, Truist’s ROCE (return on capital employed) contracted to 8.4% from 10.3% a year ago.
Truist’s Unimpressive Outlook
For the upcoming quarter, Truist expects a nearly 2% sequential decline in its revenue. For Fiscal year 2024, the company foresees a 4% to 5% drop in its top line.
What Is the Target Price for TFC Stock?
Truist’s share price has rallied by nearly 40.6% over the past six months. Overall, the Street has a Moderate Buy consensus rating on Truist, alongside an average TFC price target of $41.84. However, analysts’ views on the stock could see a revision following today’s earnings report.
Read full Disclosure