Analysts Just Slashed Their Truist Financial Corporation (NYSE:TFC) Earnings Forecasts

Market forces rained on the parade of Truist Financial Corporation (NYSE:TFC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. The stock price has risen 6.3% to US$37.97 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the consensus from 15 analysts covering Truist Financial is for revenues of US$20b in 2024, implying a noticeable 3.1% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$4.47 per share. Previously, the analysts had been modelling revenues of US$23b and earnings per share (EPS) of US$4.65 in 2024. So we can see that the consensus has become notably more bearish on Truist Financial's outlook with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Truist Financial

There was no major change to the consensus price target of US$42.43, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Truist Financial's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.1% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Truist Financial is expected to lag the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Truist Financial dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Truist Financial after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Truist Financial analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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