Why Truist Financial Stock Is Not A Buy Ahead Of Q2 Earnings

Summary

• Truist Financial Corporation will report its second-quarter results on Monday, July 22, before the market opens.
• In this update, I share what I expect from Truist's Q2 results — especially given the solid Q2 report from rival U.S. Bancorp.
• I take a fresh look at the utilization of the Bank Term Funding Program, under which the Federal Reserve ceased making new loans in March.
• I also explain why I am no longer buying TFC stock, despite its seemingly still low valuation.

Art Wager

Introduction

Truist Financial Corporation (NYSE:TFC), one of the largest “regional” banks in the U.S., is probably best known for its significant unrealized losses in its held-to-maturity (HTM) portfolio. This was ultimately the reason for the precipitous stock decline in March 2023

Analyst’s Disclosure:I/we have a beneficial long position in the shares of TFC, USB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The contents of this article, my previous articles, and my comments are for informational purposes only and may not be considered investment and/or tax advice. I am a private investor from Europe and share my investing journey here on Seeking Alpha. I am neither a licensed investment advisor nor a licensed tax advisor. Furthermore, I am not an expert on taxes and related laws - neither in relation to the U.S. nor other geographies/jurisdictions. It is not my intention to give financial and/or tax advice, and I am in no way qualified to do so. Although I do my best to make sure that what I write is accurate and well researched, I cannot be held responsible and accept no liability whatsoever for any errors, omissions, or for consequences resulting from the enclosed information. The writing reflects my personal opinion at the time of writing. If you intend to invest in the stocks or other investment vehicles mentioned in this article – or in any investment vehicle generally – please consult your licensed investment advisor. If uncertain about tax-related implications, please consult your licensed tax advisor.