Done by Manya Saini
(Reuters) – Citigroup stock could double in value over the next three years as the Wall Street lender’s profits rise, analysts at Wells Fargo wrote in a client note on Friday, making it the top brokerage in the large-cap banking sector. Named the choice.
CEO Jane Fraser implemented a sweeping overhaul in 2024 to improve the bank’s performance, cut costs, and simplify its sprawling businesses. As part of the turnaround, the City plans to cut 20,000 jobs by 2026.
“Citi’s shift from multi-year value destruction to value creation is, in our view, one of the greatest drivers of sustainable stock price outperformance,” said Citi bull Mike Mayo.
Citi is the “dominant choice” of brokerages under almost any situation, except in a recession. Wells Fargo raised its price target to $110 from $95, maintaining its “overweight” rating.
Shares of Citi rose 1.2% to $70.78 in morning trading.
The third-largest US lender now operates under a new organizational structure as part of Fraser’s broader efforts to cut red tape and boost profitability.
Analysts had described 2024 as a transformative year for the bank and said the reshuffle represented a turning point that would boost its efficiency.
Separately, KBW analysts led by David Conrad also raised their price target on Citi to $85 from $82, calling it one of their “top views” for 2025.
The brokerage said the bank could benefit from increased capital markets activity, and its discounted valuation to peers could present a compelling opportunity for investors.
According to LSEG data, Citi trades at a price-to-book ratio of 0.69, a common benchmark for valuing stocks. This compares with JPMorgan Chase’s 2.08 and Bank of America’s 1.25.
A ratio below one usually indicates an undervalued stock.
The bank is expected to report fourth-quarter and full-year results in mid-January, with all eyes on executive commentary on growing core businesses such as wealth and investment banking in 2025.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Sriraj Kaluvilla)
