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Truist Financial Gains 15% in 6 Months: How to Play the Stock Now?
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Key Takeaways
Truist Financial shares rose 15% in six months, but underperformed its broader industry and close peers.
TFC expects 10% fee-income growth in 2026, helped by IB, trading and wealth management.
TFC faces rising expenses and weaker credit quality, making an attractive entry point preferable.
Truist Financial Corporation (TFC - Free Report) shares have gained 15% over the past six months, in line with the S&P 500 Index’s rally. The industry to which the stock belongs has gained 27.8%.
If we compare TFC’s price performance with two of its close peers, Bank of America Corporation (BAC - Free Report) and The Bank of New York Mellon Corporation (BNY - Free Report) , it appears that the stock has underperformed both. Over the past six months, BAC and BNY shares have rallied 34.2% and 40%, respectively.
6-Month Price Performance
Image Source: Zacks Investment Research
Despite underperforming the broader industry, TFC’s performance has been decent over the past six months. Now, let us find out if the stock has upside potential left. In order to understand this, let us dig deep into its fundamentals and growth prospects.
Key Positives of TFC
Net Interest Income (NII) Growth: Supported by growth in loans and higher rates, Truist Financial’s NII has demonstrated a relatively stable growth trajectory, witnessing a 0.9% compound annual growth rate (CAGR) over the five years ended 2025, with momentum continuing into the first half of 2026.
Management has moderated its 2026 NII growth outlook, primarily reflecting the continued optimization of less strategic lending portfolios, lower loan spreads, a less favorable deposit mix and changes in the forward rate curve. However, these headwinds appear manageable and hence solid loan demand and the ongoing repricing of deposits are likely to continue to provide support to funding costs and spread income as the rate cycle evolves.
This is reflected in management’s expectation for 1.5% sequential NII growth in the third quarter of this year.
Improving Fee Income: Following the 2024 divestiture of its insurance business, Truist Financial has been placing greater emphasis on recurring, client-driven fee income to diversify its revenue mix and reduce reliance on spread income. Excluding securities losses, its non-interest income saw a 1.9% CAGR from 2019 to 2025, supported by the Truist merger, and continued strength in wealth management and other fee-based businesses.
Momentum has continued into the first half of this year, with management expecting non-interest income to rise 10% in 2026, an upgrade from its previous high-single-digit growth outlook.
The improved view reflects stronger performance across investment banking (IB), trading and wealth management, while greater connectivity across commercial, corporate and IB should create additional opportunities for cross-selling and recurring client fees.
Strategic Investments & Digital Transformation: Truist Financial continues to reposition its franchise toward higher-growth, higher-return opportunities, supported by its multi-year investment program launched in 2025 to expand talent, build commercial pipelines and strengthen digital capabilities in attractive markets.
The strategy has already gained traction, as middle-market deposits rose 12% year over year in second-quarter 2026, including 27% growth in expansion markets such as Texas, Pennsylvania and Ohio.
At the same time, the company is using digitalization and AI as operating levers rather than simply technology initiatives. Truist Assist usage increased 60% year over year to nearly 2 million interactions in the second quarter. AI-enabled tools, including Truist Insights, Truist Assist and call summarization, are helping reduce routine service workloads and improve employee productivity, creating capacity to reinvest in higher-value client activities.
Together, targeted market expansion, stronger digital engagement and AI-driven productivity should support higher-quality revenue growth and operating leverage, providing a potential catalyst for improved profitability over the longer term.
Strong Balance Sheet: Truist Financial entered 2026 with a large, diversified balance sheet and a solid liquidity position. As of June 30, 2026, the company held $39.3 billion in cash and due from banks and interest-bearing deposits against $69.9 billion of total debt, with only 38.5% classified as short-term.
Supported by its robust liquidity position, the company continues to prioritize capital returns while maintaining adequate regulatory buffers. Following the successful completion of the 2026 Federal Reserve stress test, TFC maintained its quarterly dividend at 52 cents per share, underscoring confidence in the strength and resilience of its capital position.
It also has significant capacity for share repurchases, with $7.7 billion remaining under its $10-billion authorization as of June 30, 2026, and management targeting $5 billion in buybacks in 2026.
What’s Hurting TFC’s Growth?
Rising Expenses: Truist Financial’s cost base has stabilized from the elevated post-merger levels, supported by roughly $750 million of gross savings from its 2023 strategic cost-saving program. However, non-interest expenses rose in 2025 and the first half of 2026, driven by higher personnel costs, and continued investments in technology and digital capabilities, including AI-enabled tools.
Expense Trend
Image Source: Zacks Investment Research
While these investments could support productivity over the longer term, continued reinvestment may limit operating leverage and constrain bottom-line growth. With management expecting non-interest expenses to increase 1.75% in 2026, persistent cost pressures remain a headwind to earnings expansion.
Deteriorating Credit Quality: Truist Financial’s credit quality has been weakening, as reflected in sharply higher loss provisioning and charge-offs. Over the three years ended 2025, provision for credit losses and net charge-offs (NCOs) saw a CAGR of 34.6% and 27.5%, respectively, driven by an increasingly unfavorable macro backdrop.
While provisions declined in the first six months of 2026, NCOs increased. Given the still-challenging operating environment, provisions and NCOs will likely remain elevated and trend higher in the near term.
Analyzing Analyst Sentiments for TFC
Analysts do not seem optimistic regarding the company’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for TFC’s 2026 earnings has been unchanged at $4.58, while the 2027 estimate has been revised lower to $4.93.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Here’s How to Approach TFC Stock Now
Backed by lower funding costs, steady loan demand and growth in fee-based businesses, Truist Financial remains well-positioned to deliver top-line growth. Its decent liquidity supports sustainable capital distributions. Strategic restructuring initiatives, investments in digital capabilities and expansion in high-growth markets will further support revenue prospects.
However, elevated expenses due to higher personnel costs and continuous investment in technology will likely keep hurting Truist Financial's bottom line in the near term. A challenging macroeconomic environment could strain its financial performance and lead to weakening credit quality, posing another concern.
Thus, investors should not rush to buy the TFC stock now. Instead, they should keep it on their radar and wait for an attractive entry point. Those who already own the TFC stock can hold on to it because it is less likely to disappoint over the long term, given its strong fundamentals.
View the Zacks #1 Rank List
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Truist Financial Gains 15% in 6 Months: How to Play the Stock Now?
Key Takeaways
Truist Financial Corporation (TFC - Free Report) shares have gained 15% over the past six months, in line with the S&P 500 Index’s rally. The industry to which the stock belongs has gained 27.8%.
If we compare TFC’s price performance with two of its close peers, Bank of America Corporation (BAC - Free Report) and The Bank of New York Mellon Corporation (BNY - Free Report) , it appears that the stock has underperformed both. Over the past six months, BAC and BNY shares have rallied 34.2% and 40%, respectively.
6-Month Price Performance
Image Source: Zacks Investment Research
Despite underperforming the broader industry, TFC’s performance has been decent over the past six months. Now, let us find out if the stock has upside potential left. In order to understand this, let us dig deep into its fundamentals and growth prospects.
Key Positives of TFC
Net Interest Income (NII) Growth: Supported by growth in loans and higher rates, Truist Financial’s NII has demonstrated a relatively stable growth trajectory, witnessing a 0.9% compound annual growth rate (CAGR) over the five years ended 2025, with momentum continuing into the first half of 2026.
Management has moderated its 2026 NII growth outlook, primarily reflecting the continued optimization of less strategic lending portfolios, lower loan spreads, a less favorable deposit mix and changes in the forward rate curve. However, these headwinds appear manageable and hence solid loan demand and the ongoing repricing of deposits are likely to continue to provide support to funding costs and spread income as the rate cycle evolves.
This is reflected in management’s expectation for 1.5% sequential NII growth in the third quarter of this year.
Improving Fee Income: Following the 2024 divestiture of its insurance business, Truist Financial has been placing greater emphasis on recurring, client-driven fee income to diversify its revenue mix and reduce reliance on spread income. Excluding securities losses, its non-interest income saw a 1.9% CAGR from 2019 to 2025, supported by the Truist merger, and continued strength in wealth management and other fee-based businesses.
Momentum has continued into the first half of this year, with management expecting non-interest income to rise 10% in 2026, an upgrade from its previous high-single-digit growth outlook.
The improved view reflects stronger performance across investment banking (IB), trading and wealth management, while greater connectivity across commercial, corporate and IB should create additional opportunities for cross-selling and recurring client fees.
Strategic Investments & Digital Transformation: Truist Financial continues to reposition its franchise toward higher-growth, higher-return opportunities, supported by its multi-year investment program launched in 2025 to expand talent, build commercial pipelines and strengthen digital capabilities in attractive markets.
The strategy has already gained traction, as middle-market deposits rose 12% year over year in second-quarter 2026, including 27% growth in expansion markets such as Texas, Pennsylvania and Ohio.
At the same time, the company is using digitalization and AI as operating levers rather than simply technology initiatives. Truist Assist usage increased 60% year over year to nearly 2 million interactions in the second quarter. AI-enabled tools, including Truist Insights, Truist Assist and call summarization, are helping reduce routine service workloads and improve employee productivity, creating capacity to reinvest in higher-value client activities.
Together, targeted market expansion, stronger digital engagement and AI-driven productivity should support higher-quality revenue growth and operating leverage, providing a potential catalyst for improved profitability over the longer term.
Strong Balance Sheet: Truist Financial entered 2026 with a large, diversified balance sheet and a solid liquidity position. As of June 30, 2026, the company held $39.3 billion in cash and due from banks and interest-bearing deposits against $69.9 billion of total debt, with only 38.5% classified as short-term.
Supported by its robust liquidity position, the company continues to prioritize capital returns while maintaining adequate regulatory buffers. Following the successful completion of the 2026 Federal Reserve stress test, TFC maintained its quarterly dividend at 52 cents per share, underscoring confidence in the strength and resilience of its capital position.
It also has significant capacity for share repurchases, with $7.7 billion remaining under its $10-billion authorization as of June 30, 2026, and management targeting $5 billion in buybacks in 2026.
What’s Hurting TFC’s Growth?
Rising Expenses: Truist Financial’s cost base has stabilized from the elevated post-merger levels, supported by roughly $750 million of gross savings from its 2023 strategic cost-saving program. However, non-interest expenses rose in 2025 and the first half of 2026, driven by higher personnel costs, and continued investments in technology and digital capabilities, including AI-enabled tools.
Expense Trend
Image Source: Zacks Investment Research
While these investments could support productivity over the longer term, continued reinvestment may limit operating leverage and constrain bottom-line growth. With management expecting non-interest expenses to increase 1.75% in 2026, persistent cost pressures remain a headwind to earnings expansion.
Deteriorating Credit Quality: Truist Financial’s credit quality has been weakening, as reflected in sharply higher loss provisioning and charge-offs. Over the three years ended 2025, provision for credit losses and net charge-offs (NCOs) saw a CAGR of 34.6% and 27.5%, respectively, driven by an increasingly unfavorable macro backdrop.
While provisions declined in the first six months of 2026, NCOs increased. Given the still-challenging operating environment, provisions and NCOs will likely remain elevated and trend higher in the near term.
Analyzing Analyst Sentiments for TFC
Analysts do not seem optimistic regarding the company’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for TFC’s 2026 earnings has been unchanged at $4.58, while the 2027 estimate has been revised lower to $4.93.
Earnings Estimate Revision
Image Source: Zacks Investment Research
Here’s How to Approach TFC Stock Now
Backed by lower funding costs, steady loan demand and growth in fee-based businesses, Truist Financial remains well-positioned to deliver top-line growth. Its decent liquidity supports sustainable capital distributions. Strategic restructuring initiatives, investments in digital capabilities and expansion in high-growth markets will further support revenue prospects.
However, elevated expenses due to higher personnel costs and continuous investment in technology will likely keep hurting Truist Financial's bottom line in the near term. A challenging macroeconomic environment could strain its financial performance and lead to weakening credit quality, posing another concern.
Thus, investors should not rush to buy the TFC stock now. Instead, they should keep it on their radar and wait for an attractive entry point. Those who already own the TFC stock can hold on to it because it is less likely to disappoint over the long term, given its strong fundamentals.
At present, Truist Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.