Shares of Truist Financial Corp (NYSE:TFC) continued to rise in early trading on Monday, after the company on Friday reported strong first-quarter results.

The company reported its quarterly results largely ahead of expectations and management's new long-term target reflects confidence in the durability of the company's profitability improvement, according to RBC Capital Markets.

The Truist Financial Analyst: Analyst Gerard Cassidy maintained an Outperform rating, while raising the price target from $51 to $53.

The Truist Financial Thesis: The company reported strong earnings and profitability in the first quarter, Cassidy said in the note.

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Truist Financial's net income grew by 25% year-on-year and 9% sequentially to $1.4 billion, or $1.09 per diluted share, beating consensus estimates by 9%, the analyst stated. He added that the company's core profitability metrics "improved meaningfully," with:

  • ROTCE (return on tangible common equity) up 180 basis points to 14.3%.
  • ROACE (return on average capital employed) up 140 bps to 9.5%.
  • ROA (return on assets) up 15 bps to 1.03%.

Truist Financial's revenue grew 5.1% year-on-year to $5.2 billion, driven mostly by noninterest income, Cassidy mentioned.

Management lowered their 2026 NII (net interest income) growth outlook from 3%-4% to 2%–3%, citing the removal of two expected Fed Funds rate cuts, the analyst said. He added that the full-year earnings guidance remained unchanged, as the company raised its noninterest income growth outlook to high single digits from its previous projection of mid- to high single digits.

Truist Financial returned $1.8 billion to shareholders in the first quarter with share buybacks of $1.1 billion and dividend payouts of $700 million, Cassidy stated. The company has raised its 2026 share repurchase authorization from $4.0 billion to $5.0 billion, he added.

"Management used 1Q26’s results to establish a new long-term (3-5 years) ROTCE target of 16–18%, reflecting confidence in the durability of TFC’s profitability improvement," the analyst wrote. He added that this is likely to be driven by:

  • Accelerating fee growth
  • NIM (net interest margin) expansion
  • Client deposit growth
  • Balance sheet optimization
  • Potential tailwind from the evolving Basel III capital framework

TFC Price Action: Shares of Truist Financial had risen by 0.77% to $50.96 at the time of publication on Monday.

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