Citigroup Inc’s (NYSE:C) management presented a “realistic set of financial goals” during the investor day event, according to BofA Securities.
The Citigroup Analyst: Ebrahim Poonawala maintained a Buy rating for Citigroup, while reducing the price target from $100 to $90.
The Citigroup Thesis: The company’s medium-term target for ROTCE (return on tangible common equity) of 11% to 12% was “consistent with our expectations,” Poonawala said in the note.
“For sure, there are aspects of mgmt’s strategy that may cause certain investors to be skeptical, but when we net everything out, getting to a low double digits ROTCE on a sustainable basis should not be particularly challenging given ongoing investments that should boost growth and deliver structural efficiencies,” the analyst wrote.
He reduced the earnings estimate for 2022 and 2023 from $7.75 per share to $7.04 per share and from $7.95 per share to $7.85 per share, respectively.
While saying that the next 12 to 18 months could be “messy,” as management executes the announced business exits and addresses the regulatory consent order, “for investors who are onboard with mgmt’s strategy, the payoff could be quite attractive, especially if mgmt is able to demonstrate that Citi is making steady progress toward achieving its strategic targets,” Poonawala further mentioned.
C Price Action: Shares of Citigroup had declined by 3.31% to $57.59 at the time of publication Thursday.
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