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Valued at a market cap of $20.2 billion, Providence, Rhode Island-based Citizens Financial Group, Inc. (CFG) operates in the banking sector. It offers various retail and commercial banking products and services across the U.S., serving individuals, small businesses, and institutions.
Shares of the bank have outperformed the broader market over the past 52 weeks. CFG has increased 78.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 36.8%. In 2024, shares of CFG are up 38.2%, compared to SPX’s 25.7% gain on a YTD basis.
Zooming in further, CFG has also outpaced the Financial Select Sector SPDR Fund’s (XLF) 46.1% return over the past 52 weeks and 30.8% return on a YTD basis.
Shares of Citizens Financial Group fell 2.5% on Oct. 16 due to disappointing Q3 results, with adjusted revenue of $1.9 billion missing analysts’ expectations. The company reported a 10.1% year-over-year decline in net interest income (NII), driven by a lower net interest margin (NIM) and a drop in average interest-earning assets. Additionally, loan and deposit balances fell short of analyst estimates, reflecting a decline in overall customer activity. Increased credit losses, including a 25.5% jump in net charge-offs and a 28.2% rise in non-accrual loans, further raised concerns about the bank's credit quality.
For the current fiscal year, ending in December, analysts expect CFG’s EPS to grow 2.2% year-over-year to $3.20. The company’s earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Among the 20 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.”
On Oct. 18, RBC Capital analyst Gerard Cassidy raised Citizens Financial's price target to $45 and maintained an “Outperform” rating. The bank's Q3 earnings beat was driven by lower expenses, though offset by lower noninterest income and net interest income, with some credit quality weakness noted despite strong capitalization.
As of writing, CFG is trading below the mean price target of $46.92. The Street-high price target of $50, implies a potential upside of only 9.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
