Is Truist Financial stock a buy as regional bank smashes Q3 expectations?

On Friday, Truist Financial Corp (NYSE:TFC) shares surged nearly 1% after announcing its most recent quarterly results. The company reported solid fiscal third-quarter revenue and earnings before markets opened, beating analyst expectations.

Truist posted FQ3 non-GAAP earnings per share of $1.42, beating the average for analyst expectations of $1.20. Moreover, the company’s GAAP EPS of $1.20 outperformed the Street estimate of $1.09, while revenue for the quarter of $5.63 billion was $100 million ahead of estimates despite posting a marginal Y/Y growth of 0.5%.

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Truist Financial shares are up nearly 30% this year and more than 45% over the last 12 months.

Time to buy TFC shares?

From an investment perspective, Truist Financial stock trades at an attractive trailing 12-month P/E of 15.98 and an even better forward P/E of 12.45. Therefore value investors could find the stock an exciting option for their portfolios. 

However, analysts expect the Charlotte, NC-based bank’s earnings per share to decline by more than 17% this year, before falling by a further 4.62% next year. Therefore, growth investors could opt for alternatives in the market.

Nonetheless, TFC’s exciting dividend yield of 3.14% could gain the attention of dividend investors.

Is a pullback imminent?

Technically, Truist Financial shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock price has surged closer to the overbought conditions of the 14-day RSI, creating an opportunity for a short-term pullback.

Therefore, investors could target potential pullbacks at about $58.82, or lower at $56.92, while $62.58 is a crucial support zone.

It could be time to short TFC stock

In summary, although Truist Financial shares still trade at lucrative valuation multiples following the solid quarterly performance, its growth prospects are underwhelming.

TFC shares are up more than 13% since the 21st of September, thus pushing the stock price closer to overbought conditions. Therefore, the stock seems poised for a short-term pullback before the rally continues.

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