According to Citi, shares of Truist Financial could jump as much as 60% after the recent plunge. Analyst Keith Horowitz upgraded the bank stock to buy from neutral, saying investors are wrong about the deposit outlook at Truist. “TFC beer case is about high HTM [held-to-maturity] loss relative to equity and we believe this thesis is flawed. We are of the view that the deposit outlook is fair, meaning that the securities can be held at maturity without realizing a loss (the opportunity cost less net interest margin over time),” Horowitz wrote to clients on Wednesday. “Recently We view this as an attractive entry point, given TFC’s price action, and are upgrading TFC to buy,” he said. Truist shares are down 25% in 2023, and up 17% this and last week, respectively. and fell more than 16% as investors feared the risk of contagion following the Silicon Valley Bank failure. The analyst’s $52 price target means shares could jump 63% from Tuesday’s closing price of $31.88. The stock is down 2% in the premarket. Truist will not be forced to sell securities to stay afloat,” the analyst said. “Given the very different deposit mix of TFC and a new BTFP program, it seems likely that TFC Securities will be a forced seller, so it is not clear why the market is so focused on this issue, possibly a lost In addition to h. F. Horowitz said, “Look at SVB next, but TFC is a fundamentally different bank, so it’s an apples and oranges comparison.” TFC 5D Mountain Truest Shares 5-Day — CNBC’s Michael Bloom contributed to this report.
Orignal Post From: Citi upgrades Trueist, investors say comparing ‘apples and oranges’ with SVB is unfair