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On Thursday, Evercore ISI increased its price target on shares of Citi (NYSE:C) to $79 from the previous $69, while keeping an In Line rating on the stock. The firm's analysts cited Citi's robust fourth-quarter performance and the announcement of a substantial $20 billion budget for share repurchases as key factors driving the stock's significant rise.
Shares of Citi surged, closing the day with a 6.5% gain, bringing the stock near its 52-week high of $79.25. The $148 billion banking giant has demonstrated impressive momentum, with a remarkable 56.5% return over the past year according to InvestingPro data.
The financial institution also refined its medium-term return on tangible common equity (ROTCE) target, adjusting it from the initial range of 11-12% down to 10-11%. This move was described as a waypoint rather than a final goal, signaling a realistic approach that was well-received by investors, who seemed undisturbed by the adjustment. The bank's commitment to shareholder returns remains strong, having maintained dividend payments for 14 consecutive years, with a current yield of 2.86%.
Evercore ISI highlighted the company's management team's comments on gains in Banking & Markets and expressed confidence in the activation of pent-up pipelines in 2025. According to the analysts, this aligns with the general optimism of Citi's peers in the banking sector.
The report also noted improvements in the profitability of Citi's US Personal Banking (USPB) during the fourth quarter. Management anticipates continued progress in this area, attributing potential growth to automation and technological investments.
Additionally, the growth of card balances and the integration of partnership portfolios, such as with American Airlines (NASDAQ:AAL), are expected to bolster the bank's performance.
Finally, Evercore ISI pointed out the strength of Citi's services revenue in the last quarter. The firm's analysts mentioned that the management team remains optimistic about the potential of these services, alongside the USPB, to serve as pillars for future high returns.
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