Truist Seeing Some Short-Term Pressures, But The Long-Term Opportunity Is Attractive

 

This hasn’t been a good year so far for Truist (TFC), with the shares lagging the large bank average and most of its peers. While I don’t think there’s a single issue to point to, I get the sense that analysts and investors are frustrated by the lack of a big near-term “pop” from the SunTrust deal and the reality that there’s not a lot the company can do to drive better results until rates and loan demand recover.

I understand the short-term frustrations with Truist, but I think that overlooks the long-term opportunities from the company’s diversified revenue base (including the large insurance business), its leverage to “Main Street” lending growth, and the above-average growth potential of its geographic footprint. I believe that patience will be rewarded, and that long-term core earnings growth in the mid-single-digits can support a double-digit annualized return from here – making this a relatively attractive option in the large bank sector.

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Truist Seeing Some Short-Term Pressures, But The Long-Term Opportunity Is Attractive