On Tuesday, Truist Securities began coverage on shares of Citi (NYSE:C), issuing a Buy rating and establishing a price target of $85.00.
The financial institution, currently trading near its 52-week high of $73.98 with a market capitalization of $137.57 billion, is recognized for its potential path to increased profitability and progress in its strategic goals. According to InvestingPro analysis, Citi appears slightly undervalued based on its comprehensive Fair Value model.
The coverage initiation by Truist Securities highlights Citi's ongoing efforts towards simplification and regulatory compliance. According to the firm, while Citi may not meet its management's targets within the projected timeline, the consensus estimates align with this more gradual progress.
Analysts at Truist believe that the bank will achieve above-peer earnings per share growth in 2025 and 2026 due to expanding operating leverage, improvements in return on tangible common equity (ROTCE), and the potential for increased capital returns. The bank has demonstrated commitment to shareholder returns, maintaining dividend payments for 14 consecutive years, as highlighted by InvestingPro data.
Citi's journey is marked by the strategic steps it is taking to enhance its operations and satisfy regulatory requirements. Truist Securities points out that even incremental progress in these areas is likely to support the bank's valuation, suggesting it could move closer to 9 times price-to-earnings (P/E) ratio and 0.9 times tangible book value (TBV).
The firm also notes the favorable conditions that could benefit Citi, including a more lenient regulatory environment and the possibility of a recovery in capital markets. With Citi's upcoming earnings report in 8 days, investors following InvestingPro's comprehensive analysis can access detailed insights and additional ProTips about the company's financial health and market position.
Moreover, Truist Securities sees opportunities for structural improvements within Citi, particularly in the wealth management sector, which could further bolster the bank's performance.
Truist Securities' initiation of coverage on Citi with a positive outlook reflects the anticipation of the bank's financial growth and strategic advancements in the coming years. The $85.00 price target set by the firm represents their confidence in Citi's ability to achieve its goals and deliver value to its shareholders.
In other recent news, Citigroup (NYSE:C) has been the focus of several analyst updates. Keefe, Bruyette & Woods has maintained an Outperform rating for Citigroup, with an increased target price of $85.
The firm suggests that Citigroup could benefit from potential regulatory developments, potentially leading to an 18% boost in earnings per share. The bank is also on track to reach its 2024 revenue projections, between $80 billion and $81 billion, and has set a goal of $1 billion in share buybacks for the current quarter.
In addition to this, BofA Securities has reiterated a Buy rating on Citigroup, reflecting confidence in the bank's management and path to improved Return on Tangible Common Equity by 2026. Wells Fargo (NYSE:WFC) analysts have also adjusted their outlook on Citigroup, raising the price target to $110 and maintaining an Overweight rating. They anticipate a shift from a period of value destruction to one of value creation.
Piper Sandler has reaffirmed its Overweight rating on Citigroup's shares, citing the company's effective strategies and promising future prospects. The firm highlighted Citigroup's attractive valuation and its commitment to shareholder returns.
In a significant development, Citigroup has secured an exclusive 10-year extension with American Airlines (NASDAQ:AAL) to issue the AAdvantage® co-branded card portfolio starting in 2026. This partnership aims to enhance loyalty and rewards programs for both AAdvantage® members and Citi cardholders. These are among the recent developments that have contributed to the positive outlook for Citigroup.
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