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On Thursday, DA Davidson adjusted its financial outlook for Citizens Financial Group (NYSE:CFG), reducing the price target from $53.00 to $49.00, while reaffirming a Buy rating on the stock. Currently trading at $35.46, the stock offers an attractive 4.74% dividend yield and trades at a P/E ratio of 11.5. According to InvestingPro data, eight analysts have recently revised their earnings estimates downward for the upcoming period. The modification comes amid the company’s confirmation of its 2025 guidance, which includes a projected 150 basis points of positive operating leverage (POL) by 2025.
The firm’s guidance is predicated on an 8-10% growth in fee income and a resurgence in average loan growth in the second half of 2025. However, these targets are perceived as ambitious in light of the prevailing uncertainties. In response to these challenges, DA Davidson has revised its 2025 earnings per share (EPS) forecast for Citizens Financial Group downwards by $0.08, setting a new estimate at $3.76. The bank, with a market capitalization of $15.5 billion, has shown resilience by maintaining dividend payments for 12 consecutive years, as highlighted in InvestingPro’s comprehensive analysis.
Despite these adjustments, DA Davidson remains optimistic about the bank’s prospects, citing underperformance as a factor that could lead to favorable outcomes. The analyst highlighted potential benefits for the bank, including an improved net interest margin, the expansion of its private banking sector, and growth opportunities in the metropolitan New York area.
The reassessment of the price target to $49.00 reflects a more cautious stance in the face of economic uncertainties. Nonetheless, the Buy rating indicates that DA Davidson continues to see value in Citizens Financial Group’s shares and its strategic initiatives moving forward.
In other recent news, Citizens Financial Group reported its first-quarter 2025 earnings with an earnings per share (EPS) of $0.77, surpassing the analyst forecast of $0.75. Revenue for the quarter was in line with expectations at $1.94 billion. The company executed $200 million in stock buybacks, returning $386 million to shareholders. Citizens Financial Group also announced strategic initiatives, including the sale of non-core student loans and the introduction of new credit card products. The bank’s net interest margin expanded by 3 basis points to 2.9%, and it maintains a strong balance sheet with a CET1 ratio of 10.6%. In analyst coverage, JPMorgan reiterated its Neutral rating on Citizens Financial, maintaining a price target of $43.00. The firm noted the bank’s effective expense management and strategic reshaping of its balance sheet. Despite economic challenges, Citizens Financial continues to demonstrate resilience and strategic focus.
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