Truist Could Soar If These 2 Things Go Right
Key Points
Truist expects to grow its revenue by between 4% and 5% in 2026.
It also plans to repurchase $4 billion worth of shares.
Its dividend, which yields just over 4% at the current share price, is a nice bonus for investors.
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Truist Financial (NYSE: TFC) entered 2026 expecting steady financial improvement.
In January, management noted strong loan-growth momentum and forecast a powerful combo of paying less to retain customer deposits while still earning more on each loan it makes.
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All of these pieces help explain why the bank anticipates higher revenue ahead, but now, the question is whether that outlook also points to a rising stock price.
More revenue and higher profit margins
In 2026, Truist expects its revenue to grow by 4% to 5% and its net interest income to rise 3% to 4%. That forecast depends on it growing its loan portfolio by roughly 3% to 4% over the course of the year.
Image source: Getty Images.
As an early indication of how that's going, CEO William Rogers Jr. said on Truist's fourth-quarter 2025 earnings call that he was excited by the loan growth momentum that management expects will carry into 2026.
Management also highlighted that the amount the bank has to pay customers to keep their money in the bank is improving. Truist is paying less to attract and retain deposits, and as those costs decline, that leaves it more room for profit.
In addition, net interest margin is expected to improve, which is essentially how much Truist earns on each dollar lent. That margin reached slightly over 3% in the fourth quarter. While the bank expects net interest margin to contract in Q1, its 2026 guidance is for it to be above 2025's average of 3%.
Together, greater loan growth, lower deposit costs, and healthier lending margins all support the bank's outlook for higher revenue.
Bigger stock buybacks
If the bank executes as it expects to this year, the company's stock buyback plans could add more fuel to a share price climb.
Truist repurchased $2.5 billion worth of shares in 2025 and plans to buy back an additional $4 billion worth in 2026.
For any profitable company, reducing the number of shares outstanding increases the earnings attributable to each remaining share. When a company earns more per share, investors often value those shares more highly, which supports a higher stock price.
Keep expectations in check
Truist trades now at a forward price-to-earnings ratio of 11.5, suggesting investors already expect steady earnings growth. That means the shares aren't likely to surge in the near term, and over the last five years, the stock is actually down by about 15%. However, it has recovered significantly from the deep slump it experienced in 2022 and 2023, when it fell by more than 60% from its peak.
With improving profitability, a reasonable valuation, and an attractive dividend yield of just over 4%, Truist is worth watching for value investors.
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial. The Motley Fool has a disclosure policy.
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