Citi stock rating downgraded to Hold by Freedom Capital Markets

Investing.com - Freedom Capital Markets downgraded Citi (NYSE:C), currently valued at $183.35 billion by market cap, from Buy to Hold on Tuesday, while raising its price target to $108.00 from $77.00 following the bank’s strong second-quarter performance.

The bank reported Q2 2025 net revenue of $21.7 billion, exceeding consensus estimates of $21.0 billion, while earnings per share reached $1.96, surpassing forecasts of $1.66. According to InvestingPro, Citi trades at a P/E ratio of 14.75 and offers a 2.41% dividend yield, having maintained dividend payments for 15 consecutive years.

Freedom Capital Markets noted that among major universal banks, Citi was the only one to outperform on net interest margin, while demonstrating continued progress on operational efficiency—a trend analysts expect to continue in coming quarters.

Citi’s management reaffirmed its target return on tangible common equity of 11-12% by 2026 and reiterated its commitment to increasing shareholder distributions through both dividend growth and an expanded share repurchase program.

The downgrade to Hold comes despite the raised price target, with Freedom Capital Markets citing Citi’s strong share price performance year-to-date as the primary reason for the rating change.

In other recent news, Citigroup announced a significant partnership with BlackRock to manage approximately $80 billion in wealth client assets. This move marks the largest agreement of its kind for Citi Wealth, effectively closing the bank’s last in-house asset management operations. The new collaboration, branded as "Citi Portfolio Solutions powered by BlackRock," will leverage BlackRock’s investment management expertise and technology platform. Additionally, Citi’s revenue momentum has been positively noted by KBW, which reiterated its Outperform rating and set a price target of $105.00, suggesting that Citi’s revenues are on track to exceed its $84 billion guidance for 2025. Truist Securities also raised its price target for Citi to $105.00, maintaining a Buy rating due to improved return on tangible common equity. In another strategic move, Citi is reshaping its EMEA debt capital markets team by hiring Rob Cascarino from JPMorgan Chase, who will co-head the team alongside Uday Malhotra. These developments highlight Citi’s ongoing efforts to enhance its financial performance and strategic positioning.

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