BofA Flags Truist CEO Transition in Latest Broker Downgrade
Truist Financial (TFC) faces a tough road ahead amid a leadership change and higher interest rates, BofA Securities said, joining other brokerages that recently downgraded their ratings on the regional bank. BofA lowered Truist's rating to neutral from buy, with a price target at $56. The downgrade follows recent rating cuts by Morgan Stanley, UBS Securities and Raymond James. Last month, Truist said Michael Lyons will become its chief executive, effective Sept. 1, replacing Bill Rogers, who will assume the executive chair role. "Combined with a tougher rate backdrop, we see the stock struggling to outperform until investors gain confidence that Lyons can close the profitability gap relative to peers," BofA analysts wrote in a Wednesday note to clients. The prospects of a tighter monetary policy at the Federal Reserve have increased as the Iran war drove up inflation. BofA views Truist's return on tangible common equity as among the lowest within super-regional banks. Truist's 15% ROTCE target by 2027 and a longer-term goal of 16% to 18% "still leaves Truist playing catch-up versus peers," the analysts wrote. "Financial engineering has largely been pulled forward with the.
Truist Financial (TFC) faces a tough road ahead amid a leadership change and higher interest rates, BofA Securities said, joining other brokerages that recently downgraded their ratings on the regional bank.
BofA lowered Truist's rating to neutral from buy, with a price target at $56.
The downgrade follows recent rating cuts by Morgan Stanley, UBS Securities and Raymond James.
Last month, Truist said Michael Lyons will become its chief executive, effective Sept.
1, replacing Bill Rogers, who will assume the executive chair role. "Combined with a tougher rate backdrop, we see the stock struggling to outperform until investors gain confidence that Lyons can close the profitability gap relative to peers," BofA analysts wrote in a Wednesday note to clients.
The prospects of a tighter monetary policy at the Federal Reserve have increased as the Iran war drove up inflation.
BofA views Truist's return on tangible common equity as among the lowest within super-regional banks.
Truist's 15% ROTCE target by 2027 and a longer-term goal of 16% to 18% "still leaves Truist playing catch-up versus peers," the analysts wrote. "Financial engineering has largely been pulled forward with the.