Are Analysts Underestimating Truist Financial (TFC)?

Truist Financial may be undervalued with mixed growth prospects, but the 22 analysts following the company give it an rating of hold. Their target prices range from $31.0 to $45.0 per share, for an average of $36.82. At today's price of $30.54, Truist Financial is trading -17.06% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.

Truist Financial Corporation, a holding company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. Based in Charlotte, NC, the large-cap Finance company has 52,848 full time employees. Truist Financial has provided a 6.6% dividend yield over the last 12 months.

Truist Financial has a trailing twelve month P/E ratio of 7.1, compared to an average of 14.34 for the Finance sector. Considering its EPS guidance of $3.61, the company has a forward P/E ratio of 8.5.

The average compound growth rate of the company's historical and projected earnings per share is -0.5%. On this basis, the company's PEG ratio is -13.63, which indicates that its shares are overpriced.

On the other hand, the market is potentially undervaluing Truist Financial in terms of its book value because its P/B ratio is 0.72. In comparison, the sector average P/B ratio is 1.57. The company's shares are currently -50.1% below their Graham number, indicating that its shares have a margin of safety.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $12,568 $22,705 $22,259 $23,035
Interest Income (MM) $7,313 $13,826 $13,006 $14,316
Net Margins 25.65% 19.74% 28.93% 27.18%
Net Income (MM) $3,224 $4,482 $6,440 $6,260
Depreciation & Amort. (MM) -$630 -$1,608 -$1,384 -$1,366
Earnings Per Share $3.71 $3.08 $4.47 $4.33
EPS Growth n/a -16.98% 45.13% -3.13%
Diluted Shares (MM) 815 1,358 1,349 1,332
Free Cash Flow (MM) $1,520 $6,622 $7,450 $10,517
Capital Expenditures (MM) n/a -$815 -$442 -$564
Long Term Debt (MM) $41,339 $39,597 $35,913 $43,203
Net Debt / EBITDA 3.39 1.28 0.93 1.94
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