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Investing.com - Evercore ISI upgraded Citizens Financial Group (NYSE:CFG) from In Line to Outperform and raised its price target to $55.00 from $48.00 on Friday. The stock, currently trading at $48.82 and near its 52-week high of $49.40, has demonstrated strong momentum with a 24.66% return over the past year. According to InvestingPro analysis, CFG appears slightly undervalued based on its Fair Value metrics.
The upgrade comes as Evercore ISI expects strengthening balance sheet trends, favorable net interest margin dynamics, fee income upside, and positive operating leverage to drive steady improvement in CFG’s earnings trajectory and long-term returns. With a market capitalization of $21.13 billion and a P/E ratio of 14.15x, the bank has maintained dividend payments for 12 consecutive years, demonstrating consistent shareholder returns.
The firm expressed increased confidence following second-quarter results that CFG’s loan trends are poised to accelerate as commercial and industrial growth strengthens, Private Bank momentum builds, and commercial real estate runoff abates. The bank’s net interest margin is also positioned for upside, benefiting from ongoing swap terminations and reinvestment of securities.
Citizens Financial remains committed to delivering positive operating leverage, including 150 basis points in fiscal year 2025, which should support upside to returns as growth accelerates. The bank is also teasing a new TOP program that includes a "re-imagination" of the bank, potentially promising incremental efficiencies. For deeper insights into CFG’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and additional ProTips in the detailed Pro Research Report.
Evercore’s updated outlook implies 30% EPS growth at CFG in 2026 compared to 16% at peers, supporting approximately 225 basis points of ROTCE expansion and 20 basis points of ROA improvement by year-end 2026.
In other recent news, Citizens Financial Group reported impressive second-quarter results for 2025, exceeding Wall Street expectations. The company posted an earnings per share of $0.92, surpassing the forecast of $0.88, and reported revenue of $2.04 billion, outpacing the anticipated $2.01 billion. The strong performance was driven by increases in net interest income and fee income, with the latter up by 10% due to record quarters in wealth and card fees. Citizens Financial Group maintained its full-year guidance, projecting growth in net interest income and operating leverage. The company also continues to expand its product offerings and technological innovations, with a focus on enhancing its competitive position in the market. Analysts from firms such as Goldman Sachs and UBS participated in a Q&A session, inquiring about the company’s private bank growth strategy and the potential for AI and technology transformation. Citizens Financial Group plans to continue its strategic initiatives, including the expansion of its Private Bank, targeting $12 billion in deposits and $7 billion in loans by year-end.
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