Citi (C) Analyst Day Outlines a Recovery Plan That Bumps Expenses Near Term, RBC Capital Cuts Estimates

RBC Capital analyst Gerard Cassidy reiterated an Outperform rating and $73.00 price target on Citi (NYSE: C) after the company's investor day laid out a comprehensive plan for narrowing the profitability gap between C and its peers. The medium-term ROTCE target of ~11-12% is an improvement from the 8.9% reported in 2021, but it materially lags the company's peers.

This appears to be a step in the right direction however, with the analyst stating "the path laid down by CEO Jane Fraser should allow C to gradually improve over time as its reorganization and consumer banking divestitures begin to bear fruit." "Based upon the guidance provided at the investor day and our latest outlook for the company's performance, we revise our 2022 and 2023 EPS estimates to $7.30 and $8.05 from $8.05 and $8.85, respectively. The lower estimates reflect higher-than-expected expense growth over the next two years and weaker-than-expected capital markets growth, highlighted by weakness in the current quarter's investment banking activity."

For an analyst ratings summary and ratings history on Citi click here. For more ratings news on Citi click here.

Shares of Citi closed at $59.56 yesterday.

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