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Investing.com - BofA Securities upgraded Citizens Financial Group (NYSE:CFG) from Neutral to Buy on Thursday, while raising its price target to $65.00 from $52.00. The $22.43 billion bank currently trades at a P/E ratio of 15.93x and offers a 3.23% dividend yield. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate.
The upgrade represents a significant 25% potential upside for the bank’s shares, according to BofA Securities analyst Ebrahim Poonawala.
The new price target is based on 12.5x BofA’s 2026 price-to-earnings ratio and 1.6x price-to-tangible book value for 2026, compared to the previous 10x/1.3x valuation metrics.
BofA Securities acknowledged missing Citizens Financial Group’s initial outperformance, which has exceeded super regional bank peers by 1700 basis points year-to-date.
The firm believes Citizens Financial’s valuation "remains compelling" due to "multiple idiosyncratic catalysts" that could drive earnings per share growth, with BofA forecasting 27% annual average EPS growth and potential for return on tangible common equity exceeding 15%.
In other recent news, Citizens Financial Group announced the appointment of Ted Swimmer as the new Head of Commercial Banking, succeeding Don McCree. McCree will continue with the company as Chair of Commercial Banking until his planned retirement in March 2026. Additionally, Citizens Financial Group has redeemed all outstanding shares of its Series F preferred stock, amending its charter to reflect this change and integrating details of its Series I preferred stock. The company also plans to redeem its 4.3% subordinated notes earlier than scheduled, with the redemption set for November 2025.
In analyst updates, Truist Securities raised its price target for Citizens Financial Group to $58, maintaining a Hold rating while keeping earnings per share estimates unchanged for 2025 and 2026. Meanwhile, Morgan Stanley upgraded Citizens Financial Group from Equalweight to Overweight, increasing its price target to $71. Morgan Stanley cited Citizens as a strong profitability improvement story with several positive catalysts anticipated in the coming year. These developments highlight significant changes and analyst perspectives surrounding Citizens Financial Group.
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