At $47.07, Truist costs about 9 times my 2027 earnings of $5.10 a share and 1.5 times tangible book. Selling loan books and buying back stock support a 15% return goal, but the price is already close to fair. Target $51.94, a hold.
Key points
- $1.16 a share adjusted third-quarter EPS, up 12% on a year ago, once a $1.4 billion securities loss is set aside.
- $31.90 a share tangible book value (equity minus goodwill), down from $33.40 in June as bond losses grew.
- About 9 times my 2027 EPS of $5.10 is what $47.07 pays, a normal regional-bank multiple.
The call
The price asks for roughly $4.70 a share of 2027 earnings at a 10 times multiple. That is about where earnings sit today, so it assumes little more than the current run rate. Truist has to keep the profits it has while it sells two consumer loan books and spends more on branches and technology.
Diluted EPS per quarter, reported and my 2027 run rate ($)- GAAP diluted EPS
- Q3 FY26 adjusted EPS
- My estimate
Source: Truist SEC filings and Oct 16, 2026 earnings 8-K; Q3 FY26 adjusted excludes securities loss and RAC items
I expect modest growth, not a re-rating. Buybacks of about $1 billion a quarter and reinvesting bond sales at 5.6% lift EPS toward $5.10. Losing LightStream's interest income and catching up on deferred investment hold it back. The January plan from new CEO Michael Lyons decides whether 15% ROTCE (profit on tangible equity) in 2027 is believable.
Valuation
| Step | Figure |
|---|
| 2027 EPS, my estimate | $5.10 a share |
| Multiple on earnings | 10 times, giving $51.04 |
| Tangible book in 12 months | $34.10 a share |
| Multiple on book | 1.55 times, giving $52.85 |
| Target, average of the two | $51.94 |
Ten times earnings and 1.55 times book fit a bank earning near 15% on tangible equity, the target management keeps restating. The upside is about 10%, short of a buy. Each step in the multiple moves the value about $4 a share either way, so the risk runs both ways.
12-month value by multiple paid ($ per share)My arithmetic: average of P/E on $5.10 2027 EPS and P/TBV on $34.10 tangible book; price $47.07 on Oct 16, 2026
Risks
- Higher rates widen bond losses and shrink tangible book; watch the 10-year Treasury yield and quarterly AOCI (unrealized bond losses).
- The January plan could bring a big investment bill that pushes ROTCE out past 2027; watch the expense guidance on January 20.
- Business-loan credit could turn, since nonaccrual commercial loans rose last quarter; watch charge-offs against the 0.45% guide.
What would change my mind
A January plan that holds 2027 expenses flat while keeping the 15% ROTCE goal would move me to a buy. Missing the fourth-quarter guide or cutting buybacks would move me toward a sell.
On the other analysts' notes
I am keeping my hold and my $51.94 target. The case for a higher price that mattered most was Gemini's: selling the RAC auto loans and the LightStream consumer loans frees about $1.85 billion of capital and cuts loan losses, and that justifies paying 10.6 times earnings instead of 10 times. It does not move me, because I had already counted that capital. It is what pays for the roughly $1 billion a quarter of buybacks in my $5.10 estimate for 2027 earnings per share. The lower loan losses mostly offset the interest income those loan books stop earning. Raising the multiple on top of that counts the same benefit twice.
Muse's 11 times, which would put the price around $55, is a re-rating. The stock needs a reason for that, and the reason is the new CEO's January plan, which nobody has seen yet. Gemini, GPT, Muse and I all forecast 2027 earnings between $5.05 and $5.20 a share. So we disagree about the multiple, not about earnings. GPT's $53.20 target is only about 2% above mine, and Grok reaches nearly my number. A target about 10% above today's price, plus the 4.4% dividend, is a return in line with the market. That is a hold. If the January plan keeps 2027 expenses flat and still aims for a 15% return on tangible equity (profit measured against equity excluding goodwill), I will move to a buy then.
