Truist Earnings Path Uncertain Amid Leadership Changes, Rate Hike Prospects, UBS Says in Downgrade

Truist Financial's (TFC) upcoming leadership changes and the growing prospects of a Federal Reserve rate hike have introduced fresh uncertainty to the financial service company's earnings potential in the near term, UBS Securities said Tuesday. The brokerage downgraded its rating on the Truist stock to neutral from buy and reduced its price target to $55 from $58. Last month, the company said Michael Lyons will become its chief executive, effective Sept. 1, replacing Bill Rogers, who will assume the executive chair role. "While (Truist's) shares have lagged peers this year, the recently announced CEO change and the prospect of rate hikes in the forward curve cloud near-term visibility on the leadership roster, talent retention, near-term (earnings-per-share) power, and recently introduced medium-term targets," UBS analyst Erika Najarian said in a note to clients Tuesday. "Until Mr. Lyons firms his leadership line-up, (Truist) could be vulnerable to talent turnover." The prospects of the Fed tightening its monetary policy this year have increased amid growing inflationary concerns recently. UBS lowered its EPS outlook for Truist to $4.50 from $4.60 for 2026 and to $5 from.