Analyst Kevin Heal from Argus has revised the price target for Citizens Financial Group (CFG, Financial), reducing it from $52 to $45, while maintaining a Buy rating on the stock. This adjustment follows the company's first-quarter earnings report, which fell short of expectations. The shares of regional banks, including Citizens Financial, have been under pressure amid potential policy changes that could impact the sector.
During the company’s first-quarter earnings call, the management highlighted a stable common equity tier 1 capital ratio of 10.6%. Furthermore, deposits remained relatively stable compared to the previous quarter. Despite the recent earnings miss and the challenges facing regional banks, the Buy rating reflects a positive outlook on the firm’s financial stability and future prospects.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Citizens Financial Group Inc (CFG, Financial) is $46.26 with a high estimate of $52.00 and a low estimate of $42.60. The average target implies an upside of 26.31% from the current price of $36.62. 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 $43.60, suggesting a upside of 19.06% from the current price of $36.62. 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.
