On Tuesday, Keefe, Bruyette & Woods updated their outlook on shares of Citizens Financial Group (NYSE: NYSE:CFG), increasing the price target from $53.00 to $56.00 while maintaining a Market Perform rating on the stock. The adjustment follows a quarter with mixed results for the financial institution, highlighted by a strong performance in deposits.
Citizens Financial Group's recent earnings report revealed a miss in pre-provision net revenue (PPNR) by $0.04, attributed to lower fees and higher expenses. Nonetheless, the company managed to exceed expectations in net interest income (NII) by the same amount, thanks to a robust deposit beta close to 50% and a seasonal increase in non-interest bearing deposits.
With a market capitalization of $20.94 billion and a P/E ratio of 15.69, the bank maintains a solid dividend yield of 3.53% - part of its 12-year streak of consistent dividend payments, as highlighted by InvestingPro.
Despite the mixed results, Keefe, Bruyette & Woods expressed a positive view on Citizens Financial's future, raising their 2025 estimates for the company. The firm's analysts noted that while consensus might face slight pressure due to the management's expense outlook, the projected net interest margin (NIM) exit rate for 2025 is promising.
Management anticipates an NIM between 3.05% and 3.10% by the end of 2025, aligning closely with Keefe, Bruyette & Woods' estimate of 3.06%.
Furthermore, the financial institution's management has raised the high-end NIM forecast for 2027 to 3.50%, up from the previous 3.40%. This revision suggests a more optimistic long-term financial margin outlook, which is a key metric for the banking industry's profitability.
The updated price target and the maintained Market Perform rating reflect Keefe, Bruyette & Woods' recognition of the strengths and challenges facing Citizens Financial Group. The bank's ability to navigate the quarter with strong deposit performance amidst other financial headwinds has been acknowledged by the analysts in their latest commentary.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.