Truist In A Little Better Shape Than Many Of Its Peers

Painting with a broad brush, all of the super-regional banks are more or less in the same boat now – a tough rate environment, a coming recession, and concerns over reserve levels. I will argue that Truist (TFC) is an incrementally better position, though, with cost savings and accounting options tied to the SunTrust giving the company a little more accounting and capital flexibility than many of its peers.

I believe Truist can generate double-digit earnings growth from what will likely be a very low 2020 base year, and I’m not all that concerned about Truist’s reserve or capital position. Whether the recovery is U-shaped or V-shaped, Truist will have a strong franchise in some of the most attractive U.S. banking markets, as well as a more balanced commercial and consumer operation. Execution risk remains meaningful, though, and Truist’s recent sector performance leaves less upside here than at some peers, including Bank of America (BAC) and U.S. Bancorp (USB).

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Truist In A Little Better Shape Than Many Of Its Peers