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Truist Financial Corp TFC

Morningstar Rating
$35.26 +0.28 (0.80%)
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Company Report

Truist: Selling Insurance Brokerage That Streamlines Company and Improves Capital

Truist is selling its remaining stake in its insurance brokerage business at an implied enterprise value of $15.5 billion. The company expects to book a $4.8 billion after-tax gain on the sale that along with some changes in intangible assets will increase the company’s common equity Tier 1 ratio by 230 basis points to about 12.5% under current rules and tangible book value per share by $7.12, or 33%, to around $29. The sale improves Truist’s capital position from below average to above average compared with peers. We don’t anticipate making a material change to our $50 fair value estimate for narrow-moat-rated Truist and assess shares are moderately undervalued.

Price vs Fair Value

TFC is trading at a 29% discount.
Price
$35.26
Fair Value
$69.00
Uncertainty
High
1-Star Price
$82.50
5-Star Price
$48.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Valuations are not demanding for the banks in the current environment, and especially not for Truist. It shouldn't take much to unlock some upside.

Bears

There are few positive catalysts left for the banks. Funding costs are running higher, net interest income has likely peaked, higher regulatory scrutiny is likely, and a potential recession may be around the corner.

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News

Trading Information

Previous Close Price
$34.98
Day Range
$34.5535.76
52-Week Range
$25.5646.64
Bid/Ask
$34.85 / $35.25
Market Cap
$47.03 Bil
Volume/Avg
14.1 Mil / 10.1 Mil

Key Statistics

Price/Earnings (Normalized)
9.40
Price/Sales
2.01
Dividend Yield (Trailing)
5.90%
Dividend Yield (Forward)
5.90%
Total Yield
5.90%

Company Profile

Based in Charlotte, North Carolina, Truist is the combination of BB&T and SunTrust. Truist is a regional bank with a presence primarily in the Southeastern United States. In addition to commercial banking, retail banking, and investment banking operations, the company operates several nonbank segments, the primary one being its insurance brokerage business.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Mid Value
Total Number of Employees
50,832

Competitors

Valuation

Metric
TFC
RF
PNC
Price/Earnings (Normalized)
9.408.3510.48
Price/Book Value
0.901.091.31
Price/Sales
2.012.302.76
Price/Cash Flow
5.626.057.55
Price/Earnings
TFC
RF
PNC

Financial Strength

Metric
TFC
RF
PNC
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
TFC
RF
PNC
Return on Assets (Normalized)
0.87%1.42%1.13%
Return on Equity (Normalized)
8.78%14.69%14.50%
Return on Invested Capital (Normalized)
Return on Assets
TFC
RF
PNC
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Banks - Regional Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
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USB
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ITUB
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ISNPY
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PNC
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MFG
Mizuho Financial Group Inc ADRSgxg$47.9 Bil
LYG
Lloyds Banking Group PLC ADRMdhhwt$38.3 Bil
BBD
Bank Bradesco SA ADRWhqr$28.0 Bil
DB
Deutsche Bank AGWyjc$27.3 Bil

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