Truist Financial (TFC -7.22%) took a hit this week as its share price dropped 19.1% this week from last Friday’s close through 10 a.m. ET today, according to S&P Global Market Intelligence. The stock is trading at about $31 per share as of Friday morning, down roughly 28% year to date.
The major market indexes were up slightly this week, as the S&P 500 gained 2.1%, the Dow Jones Industrial Average was up 0.3%, and the Nasdaq Composite climbed 4.9% this week, as of 10 a.m. ET today.
The failure of SVB Financial‘s Silicon Valley Bank last week, followed by the subsequent failure of Signature Bank on Sunday, set the stage for a wild week for the banking industry and bank stocks.
Federal regulators took steps to provide liquidity where needed and put a backstop in place to prevent any more bank runs from taking down other banks. But problems emerged in Europe after Credit Suisse saw its stock price plummet due to issues related to internal controls, among other factors.
Truist, the nation’s seventh-largest bank, largely got caught in the sell-off, as it hit regional banks and smaller community banks harder than it did the mega banks. However, as a super regional bank, Truist is more stable than most, as it must adhere to the risk and liquidity regulations required of systematically important financial institutions (SIFIs).
Truist got a good vote of confidence from several analysts this week amid the craziness of the bank stock sell-off. Baird upgraded Truist to outperform with a price target of $53, citing an attractive valuation for the large regional bank after this sell-off.
Also, Citigroup analyst Keith Horowitz boosted his rating on Truist to a buy this week, with a price target of $52. Horowitz said Truist has a solid deposit outlook, and that the sell-off gives it a more attractive valuation, reported The Fly.
In addition, Keefe, Bruyette & Woods upgraded Truist this week from underperform to market perform.
The consensus price target among analysts is $53 per share, so, from the current share price, that would represent a roughly 71% return.
Truist currently has a price-to-earnings ratio of 9.4, down from 9.9 at the end of 2022. At this valuation, it is definitely a bank to watch, particularly, as a super-regional SIFI bank, if it captures deposits from smaller, riskier banks.
SVB Financial provides credit and banking services to The Motley Fool. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SVB Financial. The Motley Fool has a disclosure policy.
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