Morgan Stanley Names Citi As Top Pick Among Large Cap Bank Stocks Going Into Q4 Earnings: Retail Sentiment Hits 1-Year High
By Stocktwits Inc | First Published Jan 7, 2025, 11:33 PM ISTThe analysts modeled a 37% year-on-year (YoY) rise in the lender’s investment banking revenue, higher than the bank’s 25-30% guidance. At the same time, trading growth is expected at 18% YoY.
With top U.S. banks scheduled to commence their fourth-quarter earnings next week, Morgan Stanley has named Citi its top pick among large-cap banks. Shares of the lender traded over 1.6% on Tuesday afternoon.
Morgan Stanley's price target for the stock is $104, implying a potential upside of over 40% from current levels.
Latest Videos
Analysts Betsy L. Graseck and Ryan Kenny wrote in a note that they expect Citi to benefit from the ongoing capital markets rebound.
The Morgan Stanley analysts modeled a 37% year-on-year (YoY) rise in the lender’s investment banking revenue which stands above the bank’s guidance of a 25-30% rise. At the same time, they expect trading growth at 18% YoY.
“Our 4Q24 EPS of $1.24 is 3% above the Street on higher NII and Services fees. In addition, we expect Citi to directionally point to an acceleration of buybacks in 2025, given $17B of excess capital (13% of market cap) which Citi can buy back below book value, an extremely accretive financial transaction,” the analysts said.
Morgan Stanley expects Citi’s 2025 revenue guidance to be better than Wall Street estimates.
The brokerage anticipates Citi’s 2025 revenues at $84.1 billion versus the consensus of $83.1 billion as it factors in securities roll at higher yield, strong capital markets activity, assets under custody (AUC) growth, and wealth client asset growth.
On Stocktwits, retail sentiment climbed further into the ‘extremely bullish’ territory
(90/100), hitting a one-year high. The move was accompanied by ‘extremely high’ retail chatter.
Messages on the platform indicated retail investors are optimistic about the stock’s potential.
Meanwhile, BofA analyst Ebrahim Poonawala raised the firm's price target on Citi to $95 from $90 while keeping a ‘Buy’ rating.
Citi shares have gained over 36% over the past year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.