Time To Worry? Analysts Just Downgraded Their Truist Financial Corporation (NYSE:TFC) Outlook

The latest analyst coverage could presage a bad day for Truist Financial Corporation (NYSE:TFC), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Truist Financial's 17 analysts is for revenues of US$17b in 2024 which - if met - would reflect a notable 18% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$20b in 2024. The consensus view seems to have become more pessimistic on Truist Financial, noting the substantial drop in revenue estimates in this update.

View our latest analysis for Truist Financial

We'd point out that there was no major changes to their price target of US$46.34, suggesting the latest estimates were not enough to shift their view on the value of the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Truist Financial's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Truist Financial to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Truist Financial this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Truist Financial after today.

Unsatisfied? We have estimates for Truist Financial from its 17 analysts out until 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 with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com