Citi Downgrades Truist Financial (TFC) to Neutral. Here is Why

With an annual dividend yield of 4.08%, Truist Financial Corporation (NYSE:TFC) is included among the 14 Best Blue Chip Dividend Stocks to Buy According to Hedge Funds.

Truist Financial Corporation (NYSE:TFC) is a financial services company that provides banking and trust services in the Southeastern and Mid-Atlantic United States.

On June 30, Citi analyst Benjamin Gerlinger downgraded Truist Financial Corporation (NYSE:TFC) from ‘Buy’ to ‘Neutral’, while also cutting the firm’s price estimate on the stock from $63 to $54. The lowered target, which still represents an upside of 6% from the current levels, comes ahead of the company’s upcoming Q2 earnings report on July 17.

Mr. Michael P. Lyons is set to take charge as the next president and chief executive officer of Truist on September 1, and Citi cited the uncertainty around the company’s leadership change as a reason for the downgrade. The analyst firm does not expect the bank to see any positive earnings revisions or multiple re-ratings until investors gain further clarity on its long-term outlook.

In its Q1 earnings call in April, Truist raised the guidance for its net interest income growth to 2% to 3% for full-year 2026, compared to its prior expectation of 3% to 4% growth. Additionally, it is forecasting its full-year GAAP noninterest expense to increase by around 1.75% for the year, versus its previous expectation of 1.25% to 2.25% growth.

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