Truist CEO Buys Again as Shorts Reverse

TFC has done something unusual this week: short sellers who piled in after the October 16 earnings print are now walking away, even as the stock's CEO just made his second open-market purchase in six weeks.

The short reversal is the cleaner data story right now. Short interest has fallen 3.8% over the past week to 27.5 million shares, 2.1% of the free float, unwinding much of the post-earnings build described in the previous note. The monthly picture is even more striking: shorts are down 13% from their late-September peak above 31 million shares. The ORTEX short score has dropped to 35.2, down from the 36.2 high touched on October 20. Availability in the lending pool is exceptionally loose at 2,168%, roughly 21 shares still available for every one borrowed, and cost to borrow has eased to 0.43%, down 9% on the week. The prior note flagged that there was no friction for new shorts to enter. That friction has now been tested, and most chose not to stay.

The CEO's buying is the harder-to-ignore signal. Michael Lyons purchased 25,000 shares on October 28 at $48.36 for $1.2 million, a discretionary open-market buy, not a plan-driven transaction under a 10b5-1 arrangement. That follows a $1.0 million purchase on September 17, also at roughly $48.36. Two buys totalling $2.2 million at the same price level, neither pre-arranged, is a cluster that stands out even against a $58 billion company. Net insider buying over the past 90 days is 32,720 shares at a net value of $1.5 million when only open-market purchases and sales are counted.

The Street's response to Q3 has been trimmer but not panicked. Most of the post-earnings analyst activity has been modest target-price cuts while keeping existing ratings intact. Citi lowered its target from $54 to $50 maintaining Neutral. RBC and Keefe, Bruyette cut to $51 and $54 respectively, both holding positive ratings. This week, JP Morgan's Vivek Juneja nudged his target up a dollar to $51.50 while keeping Underweight. The consensus mean target stands at $53.30 against a current price of $48.79, leaving roughly 9% implied upside, but the direction of travel on targets has been lower since the NII guidance cut. The bear case centres on NIM having contracted to 2.98% and full-year NII guidance being trimmed to 1% to 1.5% growth from 2% to 3%, with forward-starting swaps still set to pressure loan yields through early 2027. The bull case rests on the completed merger integration, a raised fee income growth guide to 10%, and the fact that net loans and leases have now risen for seven consecutive quarters, with total deposits at a record high for Q2.

The options market is mildly more defensive than its recent norm, but not dramatically so. The put/call ratio is 0.94, just 0.6 standard deviations above its 20-day average of 0.91, well below the year's cautious extreme of 1.53. That is a meaningful contrast to the prior note, when the ratio was running near 1.9 standard deviations above average. Options traders appear to have absorbed the earnings news rather than positioning for another leg lower.

TFC has added 0.7% on the week while the closest regional bank peers drifted the other direction. FITB rose 1.7%, but USB slipped 0.2%, CFG fell 2.0%, and MTB lost 0.4%. The outperformance is modest, but consistent with the short covering and the CEO's willingness to buy the stock at a level he has now targeted twice. The next earnings date is January 20, 2027, 81 days out. The specific thing to watch before then is whether Lyons adds a third purchase at this price level, and whether the NII guidance range holds or narrows at any investor update in the interim.