Selling RAC and LightStream cleans credit and capital, but 2027 earnings sit near $5.04 a share. At ten times that is a $52 stock, a market-like return from $47 including the dividend.
Key points
- $1.16 adjusted third-quarter EPS, up 12% year on year after RAC and securities losses.
- $3.65, $3.70 billion fourth-quarter net interest income after a $125 million RAC cut.
- $5.04 desk 2027 EPS at 10.3 times produces a $52 target.
The call
The $47 share needs about $4.70 of 2027 earnings at ten times, or a rebound in the multiple toward 11 times on slower growth. Tangible book is $31.90, so the stock already trades at 1.5 times that book after a 4.5% sequential drop.
I model $5.04 of 2027 earnings as LightStream closes, wholesale funding falls, and buybacks continue. That is only a market-like return once the 4.4% dividend is included. The new CEO’s January plan is the test, not a re-rating today.
Adjusted diluted EPS by quarter ($)- Reported adjusted
- Desk forecast
Company adjusted EPS through 3Q26; Q4 2026E and 2027E are the desk's.
Valuation
| Item | Figure |
|---|
| 2026 adjusted EPS (desk) | $4.71 |
| 2027 EPS (desk) | $5.04 |
| 2027 net interest income | $14.5 billion |
| Multiple on 2027 EPS | 10.3 times |
| 12-month target | $52 |
| Dividend, last 12 months | $2.08 (4.4%) |
Regional banks with similar returns trade near 11 times when loan growth is intact. Truist is remixing away from loan-only books, so I use 10.3 times. Upside is a January expense and investment plan that lifts 2027 EPS; downside is another securities loss or delayed LightStream close.
Net interest income run-rate ($ billions)Taxable-equivalent NII; 4Q26 from company outlook midpoint; 2027E is the desk's after LightStream.
Risks
- LightStream fails to close in the fourth quarter, leaving credit and wholesale funding on the books.
- Commercial paydowns continue and core loans miss the 3%, 4% growth excluding sales.
- The year-end review redirects spend into branches and technology faster than fees grow.
What would change my mind
A January 2027 plan that holds 2027 EPS above $5.40 with a clear expense offset would support a higher multiple.