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Investing.com - Raymond (NSE:RYMD) James has reiterated its Strong Buy rating and $48.00 price target on Citizens Financial Group (NYSE:CFG) following the bank’s second-quarter earnings report. The stock, currently trading near its 52-week high of $49.25, appears undervalued according to InvestingPro analysis, which also highlights the bank’s impressive 12-year track record of consistent dividend payments.
Citizens Financial Group reported second-quarter earnings per share of $0.92, exceeding both Raymond James’ forecast of $0.86 and the consensus estimate of $0.88. The earnings beat was primarily driven by lower provision expenses and higher noninterest income, partially offset by higher operating expenses. With a market capitalization of $20.82 billion and a P/E ratio of 15.27x, the bank offers an attractive dividend yield of 3.58%. For deeper insights into Citizens Financial Group’s valuation metrics and growth potential, InvestingPro subscribers have access to over 30 additional financial metrics and expert analysis.
The bank recorded a $164 million loss provision, below Raymond James’ forecast of $180 million. Fee income exceeded estimates mainly due to higher mortgage banking fees and increased other income. Loan balances grew 1.2% sequentially, surpassing the expected 0.2% increase.
Raymond James noted some negative factors, including operating expenses rising 0.4% from the first quarter compared to their forecast of a slight decrease. Deposit balances decreased by 1.4% versus an expected 0.2% increase, and loans 90+ days past due increased 25% from the prior quarter.
The research firm highlighted that Citizens Financial Group continues to make progress on recent initiatives, including building out its Private Bank, reducing its non-core portfolio, and improving its net interest margin. With significant M&A advisory fees pushed to the third quarter, Raymond James believes the bank’s capital markets business is positioned for a strong second half of 2025.
In other recent news, Citizens Financial Group reported second-quarter earnings that exceeded analyst expectations. The bank posted adjusted earnings per share of $0.92, surpassing the analyst estimate of $0.88, and reported revenue of $2.04 billion, which also beat the consensus estimate of $2.01 billion. This performance was driven by a 3% increase in net interest income and a 10% rise in fee income compared to the previous quarter. Despite the positive earnings report, some significant merger and acquisition advisory fees anticipated for the second quarter were deferred to July. Additionally, Citizens Financial Group’s board declared a quarterly common stock dividend of $0.42 per share, payable in August. The company is advancing its strategic initiatives, including expanding its Private Bank and Private Wealth management services. Management also introduced a new "Reimagining the Bank" initiative, aiming to enhance customer service and operational efficiency through new technologies.
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