Citigroup Inc C and other banking majors have been grappling with increasing delinquencies in the commercial real estate sector.
Citigroup’s Potential for Buybacks and Balance Sheet Expansion
Goldman Sachs highlights Citigroup’s capacity for cost reductions and the potential for stock repurchases or balance sheet expansion, especially if Basel 3 Endgame (B3E) rules undergo significant changes.
Analyst Richard Ramsden’s Upgrade
Citigroup Analyst: Richard Ramsden raised Citigroup’s rating from Neutral to Buy, maintaining a price target of $68.
Ramsden’s Thesis on Citigroup
Ramsden predicts that Citigroup is poised for revenue growth to reach $85.7 billion by 2026, potentially surpassing current Street estimates with a compounded annual growth rate (CAGR) of 4%.
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Ramsden believes that Citigroup’s cost-saving targets are achievable, with potential cost reductions leading to a moderation in expenses by the end of 2026. The analyst anticipates a decline in costs from $54.3 billion in 2023 to $51.8 billion in 2026, falling 2% below current Street estimates of $52.7 billion.
Additionally, Ramsden foresees an uptick in buybacks in 2024 and 2025, driven by a stronger economic outlook and improved capital generation, following a 40% decline in buybacks in 2023.
Citigroup’s Recent Price Action
Price Movements: Citigroup’s shares dipped by 1.11% to $57.12 at the time of publication on Thursday.
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