Retail Turns Bullish On Citi Stock After KBW, Piper Sandler Raise Price Targets

Citigroup Inc (C) shares traded in the green on Tuesday morning after the lender received multiple price target upgrades this week.

KBW reportedly upgraded the stock to ‘Outperform’ from ‘Market Perform, ' raising its price target to $82 per share from $70, implying a nearly 14% upside from current levels. The brokerage cited the bank’s relatively attractive valuation compared to its peers.

“Although Citi’s stock has been historically cheap, we believe near-term catalysts make the stock more attractive,” analyst David Konrad said, according to a CNBC report. “First, Citi is well positioned with its franchise and recent management changes position the firm to capture revenue opportunities in investment banking and trading given expectations for improved market conditions following the election.”

“Second, a potential decrease in regulations could ease some control and procedure risk for Citi but also provide meaningful capital relief,” the analyst stated, according to the report.

Meanwhile, Piper Sandler analyst R. Scott Siefers has reportedly raised the firm's price target on Citi to $80 from $73 while keeping an ‘Overweight’ rating on the shares.

According to the brokerage, customer health appears sound and is fading as a concern while the fourth-quarter net interest margin environment is robust with good deposit dynamics and a steeper curve.

Following the developments, retail sentiment on Citigroup improved to ‘bullish’ (73/100) from ‘bearish’ a day ago, accompanied by high message volume.

Citi Sentiment Meter and Message Volume as of 10:55 a.m. ET on Dec. 03, 2024 | Source: Stocktwits

Citi shares have rallied nearly 15% since it reported better-than-expected third-quarter earnings and revenue in mid-October, albeit with a decline in net interest income.

Revenue rose 1% year-over-year (YoY) to $20.315 billion and came in higher than an estimated $19.83 billion. Earnings per share stood at $1.51 versus an estimate of $1.31. Net interest income, the difference between interest earned and expended, fell 3% YoY to $13.36 billion.

Citi has been implementing cost-cutting and restructuring measures, including reducing headcount and management layers. CEO Jane Fraser said that while the bank continues making substantial investments in its transformation, efficiencies gained from simplification and other efforts drove a 2% reduction in expenses.

“We are on track to meet our expense and revenue targets for the year and look to close out 2024 with momentum as we prepare for 2025,” she had said in a statement.

On a year-to-date basis, Citigroup shares have gained nearly 35%, significantly outperforming the benchmark indices.

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