On Wednesday, CFRA, a well-regarded research firm, increased its price target for Citi (NYSE:C) shares from $83.00 to $90.00. The firm's analyst Kenneth Leon maintained a Buy rating on the bank's stock. Leon's updated price target is based on a forward price-to-earnings (P/E) ratio of 12.0x, which is slightly above the three-year historical average of 11.5x.
The new target is also just above Citi's net tangible book value (NTBV) of $89.35, noting that other U.S. global banks are currently trading at a premium to their NTBV. According to InvestingPro data, Citi's current P/E ratio stands at 22, with analyst targets ranging from $66 to $110, suggesting significant potential upside from its current price of $78.80.
Leon also adjusted the earnings per share (EPS) forecast for Citi, raising the 2025 EPS estimate by $0.25 to $7.50 and setting the 2026 EPS at $9.00. This projection is based on anticipated revenues of $84.5 billion for 2025 and $88.0 billion for 2026. The bank reported its fourth-quarter 2024 earnings with an EPS of $1.34, which was $0.10 higher than expected.
Revenues for the same quarter were marginally above consensus at $19.6 billion. InvestingPro analysis reveals that Citi has maintained dividend payments for 14 consecutive years, currently offering a 3.05% yield, and has demonstrated strong momentum with a 14.93% return over the past six months.
Citi experienced a slight year-over-year decline in net interest income (NII) of 1%, but this was offset by a significant increase in non-interest income, which rose by 62%. The bank saw a 1% growth in total loans, while deposits decreased by 2%. Service fees increased by 15%, with North America and International divisions up by 16% and 14%, respectively. The markets or trading segment reported a 36% increase in revenue, with equity markets up by 34% and fixed income markets by 37%.
The banking giant also saw substantial revenue growth in its banking division, posting a 27% increase. This included a 35% rise in investment banking fees, a 23% increase in mergers and acquisitions (M&A) activity, a notable 95% jump in equity underwriting, and a 24% rise in debt underwriting. Personal Banking revenue grew by 6% year-over-year, with branded cards revenue up by 7%. Moreover, the wealth segment reported a robust 20% increase in revenue year-over-year.
Looking ahead, Citi has provided guidance for a return on equity (ROE) of between 10% and 11% by 2026, indicating the bank's positive outlook for the coming years. With a market capitalization of $149.15 billion and trading near its 52-week high, InvestingPro subscribers can access 8 additional exclusive insights and a comprehensive Pro Research Report that provides deep-dive analysis of Citi's financial health and growth prospects.
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