On Monday, Citi reaffirmed its Buy rating on Citizens Financial Group (NYSE:CFG), maintaining a $45.00 price target for the stock. The confirmation follows a review of the company's management commentary for the quarter and an updated forecast for interest rates. Adjustments were made to the model, leading to a slight decrease in near-term fee and credit outlook expectations.
The firm's revised estimates show a decrease in projected earnings per share (EPS) for Citizens Financial Group. For the year 2024, the EPS estimate has been lowered by 10 cents to $3.00, compared to the FactSet consensus of $3.16. Similarly, the 2025 EPS forecast has been reduced by 10 cents to $4.05, which is slightly above the FactSet consensus of $4.01. However, the EPS estimate for 2026 remains unchanged at $5.10.
Citi's analysis suggests that Citizens Financial Group stands to benefit from net interest income (NII) tailwinds, particularly due to fixed asset repricing. This factor contributes to the firm's positive outlook on the stock and supports the decision to reiterate the Buy rating and the $45.00 price target.
Citizens Financial Group's stock rating and price target are based on Citi's expectations of the company's financial performance. The reiteration of the Buy rating indicates Citi's continued confidence in the financial institution's potential for growth and profitability.
In other recent news, Citizens Financial Group has been a subject of significant developments. The company reported a net interest margin of 2.91% and fee growth of 3% in its first quarter earnings call. Despite an 8% rise in non-accrual loans, Citizens Financial Group remains committed to its strategic initiatives and medium-term return target of 16% to 18%.
Furthermore, the company announced that Jack Read, the Corporate Controller and Chief Accounting Officer, will resign effective August 7, 2024, and John F. Woods will take over on an interim basis. In the meantime, Citizens Financial Group has appointed Jim Weiss as the new Florida market president, bolstering its leadership in the state.
In terms of analyst ratings, Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on Citizens Financial Group, with a steady price target of $39.00. Financial services firm Piper Sandler upgraded Citizens Financial Group's stock rating to 'Overweight' from 'Neutral', citing a solid capital base and attractive valuation. Similarly, Argus and Citi have increased their price targets for the company, reflecting confidence in its strategic moves and financial stability.
The company has not altered its official guidance for net interest income, fees, expenses, credit quality, and capital metrics. However, management suggested that share buybacks might be robust due to lower capital being channeled into loans. These recent developments underscore the company's strategic initiatives and financial stability.
InvestingPro Insights
Amidst the financial analysis by Citi, real-time data from InvestingPro provides additional insights into Citizens Financial Group's performance and outlook. The company's market capitalization stands at a robust $15.61 billion, with a price-to-earnings (P/E) ratio of 12.27, reflecting investor perceptions of its earnings potential. Adjusted figures for the last twelve months as of Q1 2024 show a slightly lower P/E ratio of 11.91, indicating a potentially more attractive valuation for investors considering the stock.
InvestingPro Tips highlight that Citizens Financial Group has a track record of consistent dividend payments, maintaining them for 11 consecutive years, which may appeal to income-focused investors. Furthermore, analysts predict profitability for the current year, aligning with the positive sentiment expressed in Citi's report.
With a dividend yield of 4.93% as of the latest data, the company offers a compelling return for shareholders. Moreover, there are more InvestingPro Tips available at https://www.investing.com/pro/CFG, which can provide further guidance for those interested in the company's financials.
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