Admittedly, that title is a little overheated, but the market reaction to Truist’s (TFC)
first quarter as Truist was not particularly positive, with analysts
and investors fretting about a longer timeline to expense synergies and a
greater income contribution from non-core amortization. The
disappointment moderated somewhat after the call, but the reality is
that Truist didn’t offer the sort of positive operating leverage story
that investors really want now.
Given the complexity
in modeling the merger, I wasn’t going to put much faith in this first
quarter, whatever the results. I think this merger still makes a lot of
sense from a strategic standpoint, but I also see a lot of execution
challenges and management will have to rise to the occasion. With core
underlying core earnings growth potential of around 5%, I believe these
shares are undervalued below the high $50’s.
Read the full article here:
Truist Produces The Sound, The Market Provides The Fury
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