Citizens Financial Group stock rating upgraded by Morgan Stanley

Investing.com - Morgan Stanley upgraded Citizens Financial Group (NYSE:CFG) from Equalweight to Overweight on Monday, raising its price target to $71.00 from $53.00. The stock, currently trading at $53.38, sits near its 52-week high of $53.89, reflecting strong momentum.

The upgrade reflects Morgan Stanley’s view that Citizens is among the best profitability improvement stories in its sector while trading at a discount, with several positive catalysts expected over the next 12 months. According to InvestingPro analysis, the stock appears slightly undervalued, trading at a P/E ratio of 16.22x while maintaining a solid 3.15% dividend yield.

Morgan Stanley projects Citizens’ Return on Tangible Common Equity (ROTCE) will improve from 11% in the second quarter of 2025 to 15% in 2027, closing the gap versus peers and approaching the company’s 16-18% target.

The firm identified multiple potential catalysts for Citizens over the next 12-18 months, including its Private Bank buildout, improving credit conditions, and lower capital requirements following the 2026 stress test.

Morgan Stanley’s new $71 price target is based on an 11x price-to-earnings multiple on 2027 earnings per share, implying 33% upside potential for the stock.

In other recent news, Citizens Financial Group announced the appointment of Aunoy Banerjee as the new Executive Vice President and Chief Financial Officer, effective October 24. This follows his tenure as CFO of Barclays Bank PLC. Additionally, Citizens Financial Group has committed to investing $20 million in workforce development programs from 2026 to 2028, targeting nonprofits that enhance educational and career opportunities. The company also announced a reduction in its prime lending rate to 7.25 percent, effective September 18, affecting various consumer and commercial lending products.

In terms of analyst activity, Truist Securities raised its price target for Citizens Financial Group to $52, maintaining a Hold rating, citing the bank’s strong second-quarter earnings and positive third-quarter guidance. Meanwhile, Citi increased its price target to $60, maintaining a Buy rating, influenced by the company’s third-quarter guidance. These developments reflect a positive outlook from analysts regarding the company’s performance.

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