CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month target price by $1 to $38, 10.1x our 2025 EPS estimate, below TFC’s five-year forward P/E average of 10.8x, given modest growth expectations. We lower our 2024 EPS estimate by $0.08 to $3.49 and reduce 2025’s by $0.16 to $3.76. TFC posted adjusted Q1 EPS of $0.90 vs. $1.05 a year ago, $0.10 above consensus. It was a busy quarter for TFC as it agreed to sell the remaining 80% of its insurance business for $12.6 billion. Encouragingly, this should dramatically improve the banks CET1 ratio (10.1% in Q1) by 230 bps and thus allow the bank to play offense once again as the transaction should reduce the strain on TFC’s securities portfolio. Additionally, TFC saw a resurgence in investment banking and trading income (+96% Q/Q), with management indicating that the momentum should continue in upcoming quarters as previous investments pay off and industry activity remains above deflated 2023 levels. However, weakness continued in the bank’s credit quality as net charge-offs rose 7 bps to 0.64%.