On Thursday, RBC Capital Markets adjusted its outlook on Citigroup (NYSE:C) shares, raising the price target to $85 from the previous $74 while maintaining an Outperform rating. The revision follows Citigroup's announcement of a new $20 billion common stock repurchase program set to begin in the first quarter of 2025, alongside a slightly better-than-expected outlook for the same year.
Currently trading at $78.33, Citigroup appears undervalued according to InvestingPro analysis, with the stock showing impressive momentum as it trades near its 52-week high of $79.25.
In a statement, RBC Capital analysts highlighted Citigroup's strong performance, noting it was fueled by higher net interest income and lower noninterest expenses, although this was somewhat tempered by lower noninterest income.
The bank's financial results have prompted RBC Capital to revise its earnings per share (EPS) estimates for Citigroup for the years 2025 and 2026 to $7.48 and $9.35, up from $7.30 and $9.00, respectively. The bank's robust performance is reflected in its remarkable 56.51% return over the past year, as tracked by InvestingPro, which offers comprehensive analysis through its Pro Research Reports.
The updated EPS forecasts are primarily based on a more robust projection for noninterest income and a reduced provision for credit losses. This optimistic assessment aligns with Citigroup's recent disclosure of its multi-year stock repurchase initiative, which signals confidence in the company's financial strength and commitment to returning value to shareholders. With a market capitalization of $147.86 billion and a 15-year track record of consistent dividend payments, Citigroup continues to demonstrate its commitment to shareholder returns.
Citigroup's recent performance, as noted by RBC Capital, demonstrates the bank's ability to navigate the financial landscape effectively. The firm's decision to maintain an Outperform rating indicates their belief that Citigroup's stock will continue to perform well relative to the market or its sector in the coming months.
The new stock repurchase program is a significant development for Citigroup, representing a substantial investment in its own shares. This move is often seen as a positive sign by investors, suggesting that a company believes its stock is undervalued and that it has sufficient capital to support such a buyback.
In other recent news, Citigroup has been the subject of several analyst revisions and updates. Piper Sandler has raised its price target for Citi from $80.00 to $83.00, following the bank's solid fourth-quarter performance, particularly in net interest income. The firm also revised its earnings per share (EPS) estimates for 2025 and 2026 upwards, reflecting confidence in Citi's future profitability.
Simultaneously, Oppenheimer increased its price target for Citigroup to $113, despite the bank's operational challenges and historical underperformance. The firm highlighted potential undervaluation and expressed confidence in Citigroup's ability to overcome past obstacles and improve its financial metrics.
Truist Securities reiterated a Buy rating for Citigroup, maintaining a steady price target of $85.00. The firm's analysis suggests that Citigroup's earnings per share (EPS) estimates for the years 2025 and 2026 remain unchanged. The firm also anticipates a year-over-year revenue increase of about 3.5% in 2025.
Evercore ISI boosted its price target for Citi to $79, citing the bank's robust fourth-quarter performance and the announcement of a $20 billion budget for share repurchases. The firm also noted improvements in the profitability of Citi's US Personal Banking during the fourth quarter.
Lastly, CFRA raised its price target for Citi from $83.00 to $90.00, reflecting growth potential. The firm's analyst adjusted the earnings per share (EPS) forecast for Citi, raising the 2025 EPS estimate and setting the 2026 EPS at $9.00. This comes after Citi reported its fourth-quarter 2024 earnings with an EPS of $1.34, which was $0.10 higher than expected.
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