Should You Revisit Truist Stock After the Recent 3% Slide in June 2025?

Are you thinking about what to do with Truist Financial stock? You are not alone. There is a lot of chatter among investors right now, which makes sense given how the share price has been moving lately. Over the last year, the stock is up 8.6%, and if you take a longer view, for example five years, the returns are a solid 31.8%. Of course, that does not mean Truist is without its bumps. The past month saw the stock down by 4.1%, and in just the last week, there was a 3.1% dip. Still, with a year-to-date gain of 1.9%, many are wondering if these swings actually signal opportunity, or maybe hint at shifts in market risk appetite as financials respond to the latest economic news.

It is clear investors are trying to gauge if now is the time to consider Truist as a long-term value play. Here is something worth noting: when it comes to valuation, Truist Financial scores a 5 out of 6 on our checklist for being undervalued. That means almost every key indicator suggests the stock could be trading below its true worth, which, for value-focused investors, is a big green flag. But, before making any bold moves, it is always wise to go beyond just the summary score and see how Truist shapes up under different valuation approaches. Next, let us dig into the details and look at what those methods tell us. Then, as we wrap up later, I will share an even more comprehensive way to size up the stock’s real value.

Why Truist Financial is lagging behind its peers

Approach 1: Truist Financial Excess Returns Analysis

The Excess Returns model analyzes how efficiently a company generates profits compared to the cost of its shareholders' equity. For Truist Financial, this approach highlights the returns management generates from each dollar of book value. The key numbers provide a snapshot: Book Value stands at $45.70 per share, while analysts estimate a Stable Earnings Per Share (EPS) of $4.36. The Cost of Equity, or the annual return investors expect, is $4.02 per share. This means Truist is producing Excess Returns of $0.34 per share, with an average Return on Equity of 8.89%.

Looking forward, projections estimate a Stable Book Value of $49.00 per share, indicating expectations for steady growth and capital strength. These figures are drawn from consensus analyst estimates from 14 experts, lending credibility to the future outlook.

Based on this methodology, the intrinsic value of Truist Financial is about $55.60 per share. With the current market price trading roughly 20.6% below this intrinsic value, the Excess Returns model indicates that Truist Financial appears attractively undervalued at this time.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Truist Financial.

Our Excess Returns analysis suggests Truist Financial is undervalued by 20.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Truist Financial Price vs Earnings

For profitable companies like Truist Financial, the Price-to-Earnings (PE) ratio is often the go-to metric for valuation. This measure helps investors understand how much they are paying for each dollar of earnings, which makes it especially useful for banks and other established firms that reliably generate profits year after year.

What makes a “normal” or “fair” PE ratio can vary, depending largely on expectations for a company’s future growth and its perceived risks. Fast-growing companies or those with lower risk typically have a higher PE, while slow growth or higher risk usually results in a lower PE.

Currently, Truist Financial trades at 11.6x earnings. For context, the average PE for the broader banks industry is about 11.7x, and peers are valued around 12.6x. These benchmarks suggest Truist is priced roughly in line with the industry. However, Simply Wall St’s Fair Ratio adds nuance by blending in factors like its growth outlook, profit margins, risk profile, market cap, and industry specifics. The Fair Ratio for Truist is estimated at 14.5x, which is significantly higher than both its current PE and the industry norms.

This proprietary metric is more robust than simple averages because it tailors expectations to Truist’s unique position, performance, and prospects. This helps investors avoid misleading straight-line comparisons.

Given that Truist’s current PE of 11.6x is well below the Fair Ratio of 14.5x, the stock appears to be undervalued based on this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Truist Financial Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal story or perspective about a company, built from your assumptions about its future revenue, earnings, and margins, which ties the company's journey to a financial forecast and an estimated fair value.

This approach goes beyond just looking at numbers; it helps you visualize why a company might outperform or underperform, making investing more purposeful and meaningful. Narratives are designed to be simple and accessible for all investors and are available on Simply Wall St’s Community page, where millions share and compare their insights.

By creating or exploring Narratives, you can quickly see how different scenarios or viewpoints impact Truist Financial’s fair value, and then compare that directly to today’s market price to decide whether to buy, hold, or sell. Best of all, Narratives automatically update when key news or earnings are released, so your view stays aligned with the latest information.

For example, one investor might believe Truist’s expanding digital offerings and Sunbelt growth will drive strong earnings, estimating a fair value of $55.0 per share. Another may worry about rising costs and set their fair value closer to $46.0. This shows that the power of Narratives comes from combining your view with fresh data for smarter decisions.

Do you think there's more to the story for Truist Financial? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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