Jefferies has commenced coverage on Citizens Financial (CFG, Financial), bestowing a Buy rating and setting a target price of $50. As the firm begins analyzing 32 regional and mid-cap banks, it maintains a positive outlook despite potential uncertainties like tariff impacts. Jefferies points to several positive indicators for banks such as a potential uptick in loan growth, assuming the U.S. economy skirts a recession. Other favorable factors include net interest margin growth from a steeper yield curve, solid credit metrics, and surplus capital that could be leveraged for strategic maneuvers. These elements, coupled with appealing valuations, present promising opportunities for investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Citizens Financial Group Inc (CFG, Financial) is $46.72 with a high estimate of $57.00 and a low estimate of $40.00. The average target implies an upside of 13.11% from the current price of $41.30. More detailed estimate data can be found on the Citizens Financial Group Inc (CFG) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Citizens Financial Group Inc's (CFG, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Citizens Financial Group Inc (CFG, Financial) in one year is $42.69, suggesting a upside of 3.37% from the current price of $41.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Citizens Financial Group Inc (CFG) Summary page.
CFG Key Business Developments
Release Date: April 16, 2025
- Net Interest Margin (NIM): Expanded by 3 basis points to 2.90%.
- Core Loan Growth: Increased by 1%.
- Common Equity Tier 1 (CET1) Ratio: 10.6%.
- Loan-to-Deposit Ratio (LDR): 77.5%.
- EPS: $0.77 for the first quarter.
- Return on Tangible Common Equity (ROTCE): 9.6%.
- Senior Debt Issuance: $750 million issued during the quarter.
- Private Bank Deposits: Reached $8.7 billion.
- Assets Under Management (AUM): $5.2 billion in the private bank.
- Stock Buybacks: $200 million executed during the quarter.
- Non-Core Education Loans Sale: Agreement to sell $1.9 billion, with $200 million settled in Q1.
- Interest-Bearing Deposit Costs: Decreased by 18 basis points.
- Net Charge-Offs: 58 basis points for the quarter.
- Allowance for Credit Losses (ACL) Coverage Ratio: 1.61%.
- Non-Interest Income: Down 3.5% linked quarter.
- Period-End Deposits: Increased by approximately $3 billion or 2%.
- Commercial Loans: Slight increase with modest line utilization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Citizens Financial Group Inc (CFG, Financial) reported a net interest margin (NIM) expansion of 3 basis points to 2.90%, indicating improved profitability.
- The company achieved core loan growth of 1%, demonstrating resilience in its lending operations.
- CFG maintained a strong balance sheet with a CET1 ratio of 10.6% and an LDR of 77.5%, showcasing financial stability.
- The private bank segment showed excellent growth, with deposits reaching $8.7 billion and assets under management (AUM) at $5.2 billion.
- CFG executed a strategic sale of $1.9 billion in non-core student loans, which is expected to be accretive to NIM, EPS, and ROTCE.
Negative Points
- Market uncertainty and economic challenges have led to a slowdown in capital markets activity, impacting fee income.
- There is increased uncertainty in the macroeconomic environment due to policy decisions and potential tariffs, which could affect loan demand and deal activity.
- CFG's non-interest income decreased by 3.5% linked quarter, reflecting seasonal impacts and market volatility.
- The company faces potential risks from a slowing economy, which could lead to higher credit provisions and slower loan growth.
- CFG's commercial real estate portfolio, particularly in the office sector, remains a concern, although it is being actively managed.
