TFC
I brought TFC at $41.58 yesterday here is what I like.
1) Where I brought it it was yielding 5% which is a nice dividend for a high quality regional banks at this point.
2) Usually regional banks of this size can trade at 1.5X book and in the range of 1.8-2.0X tangible book. If It did that would put the stock price would trade into the low $60's by those metrics. As of right now the stock does trade below book, granted not tangible book, but trading below book is still absurdly low for a bank of this quality and this size.
3) Because there CET1 ratios among other have climbed my guess is they will be waaaaaaaaaaaaaaaay more aggressive buying back share in FY 2025 versus FY 2024, hence I expect them to be more aggressive reducing the share count which should be accretive to earnings going forward.
4) Given guidance I expect earnings to climb from $3.69 in FY 24 to about $4.15 in FY 25. Given the fact that I expect this bank to trade at 13-15 multiple. Even conservatively I expect a $55 stock, which mean the stock is cheap here.
5) Asset quality is also healthy so that is always a plus.
Conclusion: I like TFC here thanks to a solid 5% divy where I brought, Trading at about just 10x 2025 estimates, trading below book value, in my opinion they will be more aggressive with the buyback going forward as well, and solid asset quality. Will add more on weakness. All is just my opinion, and I could always be wrong though.
AI
