To The Moon

$Truist Financial Corp(TFC)$ is expected to release its quarterly earnings on 17 April 2025 before the market open.

The consensus estimate for the revenues are expected to come in at $4.92 billion, which would represent a year-over-year increase of 2.2%.

For the quarterly earnings per share, it is anticipated to come in at $0.87 per share, reflecting a decline of 4.4% compared to the same period last year.

Truist Financial (TFC) Last Positive Earnings Saw Share Price Decline By 17.96%

Truist Financial had a positive earnings call on 17 Jan 2025 which saw its share price decline by 17.96%.

The earnings call reflects a positive outlook with strong capital positions, growth in investment banking, and digital adoption, despite challenges with narrow margins, revenue pressures, and increased expenses.

Truist Financial (TFC) Guidance

During the Truist Financial Corporation Fourth Quarter 2024 Earnings Call, the management team, including Chairman and CEO William Rogers and CFO Michael Maguire, provided guidance for 2025. They reported a fourth-quarter net income of $1.2 billion and an annual GAAP net income of $4.5 billion. The company expects revenue to grow by 3% to 3.5% in 2025, driven by low single-digit end-of-period loan growth and modest increases in both net interest income and noninterest income. They anticipate an adjusted expense increase of approximately 1.5%, aiming for positive operating leverage of 150 to 200 basis points. Truist plans to continue its $500 million share repurchase program in the first quarter of 2025, supported by a CET1 capital ratio of 11.5%. The company is focused on maintaining strong credit metrics, with an expected net charge-off rate of around 60 basis points for the year.

Key growth areas include expanding client relationships, particularly in premier banking, wealth, and payments, while also enhancing their digital platforms and investing in technology and risk infrastructure.

Key Factors to Monitor for Truist Financial (TFC) Q1 2025

Digital users grew to over 7.1 million, with digital transactions up 13% year-over-year. 275,000 new-to-bank clients acquired through digital channels, a significant increase from the previous year.

Net Interest Income (NII)

Truist’s profitability hinges on its ability to manage net interest margins (NIM) amid Federal Reserve policy shifts. Lower interest rates (if they materialize by 2025) could pressure NIM, while a "higher-for-longer" scenario may stabilize it.

Loan growth trends, particularly in commercial real estate (CRE), consumer lending, and mortgages, will be critical. Average deposit balances increased by 1.5% sequentially, with noninterest-bearing deposits up 1.8%.

Total revenue decreased 0.5% linked quarter, with net interest margin decreasing by 5 basis points to 3.07%. Noninterest income decreased by $12 million or 0.9% from the previous quarter, due to lower investment banking and trading activity.

Credit Quality

Watch for loan loss provisions and non-performing loans (NPLs). Rising defaults in CRE or consumer loans (e.g., credit cards) could signal stress.

Truist’s exposure to vulnerable sectors (e.g., office CRE) remains a focal point.

Non-Interest Revenue

Fee income from wealth management, investment banking, and insurance brokerage (post-sale of Truist Insurance Holdings). Investment banking and trading revenue increased 46% for the year compared to 2023, marking the strongest performance since 2021.

Market-sensitive revenue (e.g., investment advisory fees) tied to equity market performance.

Expense Management

Progress on cost-saving initiatives, including branch optimization and technology investments.Nonperforming loans held for investment declined $38 million linked quarter. Net charge-offs increased slightly but were in line with expectations.

The efficiency ratio (lower = better), which was 56.3% in 2024, will reflect operational discipline. Adjusted expenses grew 4% linked quarter due to higher professional fees and outside processing expenses.

Capital Returns

Share buybacks and dividend sustainability. Truist’s CET1 ratio (11.3% in Q3 2023) must balance regulatory requirements with shareholder returns.

Truist's CET1 capital ratio finished the year at 11.5%, up 140 basis points versus 2023. Returned $3.8 billion to shareholders through dividends and share repurchases.

Truist Financial (TFC) Price Target

Based on 16 Wall Street analysts offering 12 month price targets for Truist Financial in the last 3 months. The average price target is $49.71 with a high forecast of $57.00 and a low forecast of $42.00. The average price target represents a 36.23% change from the last price of $36.49.

I think we need to look at TFC for long-term considerations, Truist’s performance is tied to the U.S. economic outlook. A recession in 2024–2025 could spike credit losses.

Regional banks like Truist face competition from megabanks and fintech disruptors. There might be a shift toward higher-yielding assets and deposit cost stabilization.

Digital banking investments to improve customer retention and cross-selling. Potential stricter capital requirements (e.g., Basel III Endgame) and FDIC fee hikes post-regional bank crises (2023).

Technical Analysis - Exponential Moving Average (EMA)

Though we are seeing RSI showing improvement in momentum as it moves away from oversold region, but the share price is still in range-bound, and trading sideways, the bears are still in control.

So we need more investors confidence and momentum to help the bulls to create a daily uptrend as it is still below 26-EMA, TFC need to go above it.

Summary

Truist’s near-term performance will depend on its ability to navigate interest rate volatility, credit cycles, and expense controls. The sale of its insurance arm provides liquidity but reduces fee income diversification. The insurance business could do well in times of recession fears.

But as investors we should continue to monitor how the Interest rate trajectory which will see the Fed policy in 2024–2025).

CRE portfolio health (office space risks) and also the Execution on cost-cutting and digital initiatives.

Appreciate if you could share your thoughts in the comment section whether you think TFC could provide an earnings surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.