Barclays upgrades Citigroup to overweight

Investing.com -- Barclays upgraded Citigroup Inc (NYSE: C) to "overweight" given the company is at a key inflection point as it enters 2025, which is not fully captured in Citigroup's discounted valuation compared to peers.

“We are attracted to C as its recent actions allow it to generate more consistent, high-quality earnings, in addition to it optimizing its capital base,” analyst said. The bank has reduced its international exposure and prioritized efficiency.

Barclays (LON:BARC) set a price target of $95, with an upside scenario of $102 if economic conditions improve. This upside depends on a favourable backdrop of lower interest rates, low net charge-offs, and controlled expenses. The brokerage expects Citigroup's earnings to reach $10 per share by 2026 in this scenario.

However, the downside case is $60, tied to potential headwinds. These include worsening U.S. consumer economic conditions, particularly in credit cards, and higher-than-expected Consent Order-related expenses, which could pull 2026 EPS down to $7.50.

Barclays also flagged risks stemming from Citigroup's significant international exposure, especially in emerging markets with economic and political uncertainties.

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