On Tuesday, Truist Financial (NYSE:TFC) Corporation's (NYSE:TFC) share price target was increased by Piper Sandler from $38.00 to $41.00, while the firm maintained a Neutral rating on the stock.
This adjustment comes in the wake of Truist's recent financial maneuvers, which included the completion of the sale of its insurance holdings and a balance sheet restructuring aimed at mitigating the impact of the loss of earnings related to the sale.
The financial institution's recent disclosure, which took place last week, revealed that the net effect of these completed transactions was slightly more positive than Piper Sandler had initially projected. As a result, the firm has updated its earnings per share (EPS) estimates for Truist.
The revised forecast for the year 2024 now stands at an EPS of $3.55, up from the previous estimate of $3.44. Similarly, the EPS estimate for 2025 has been increased to $3.73 from the earlier projection of $3.55.
It's important to note that the updated EPS estimates do not factor in the one-time after-tax (A/T) gain of $4.7 billion from the sale of Truist's insurance holdings (TIH) nor the $5.1 billion A/T loss on securities. These are considered unusual items and are thus excluded from the firm's forecast.
The new price target of $41.00 is based on the higher EPS estimates and represents approximately 11 times Piper Sandler's projected EPS for the year 2025. This valuation update reflects the analyst's view of Truist's financial performance following the recent strategic transactions.
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