Citizens Financial Sees a Promising Future with Upgraded Ratings

Author: Olivia Taylor Updated: 10-09-2025 01:43 PM

Citizens Financial Group Receives Positive Outlook from BofA Securities

BofA Securities analyst Ebrahim H. Poonawala has recently upgraded Citizens Financial Group, Inc. (NYSE: CFG) from Neutral to Buy. This upgrade comes with an optimistic price target increase from $52 to $65, suggesting significant potential for growth.

Forecasting Growth and Return on Tangible Common Equity

According to Poonawala, Citizens Financial is forecasted to achieve an impressive 300bps (basis points) improvement in Return on Tangible Common Equity (ROTCE) by the year 2028, with expectations of hitting 14.6%. This anticipated rise stands out as one of the most significant improvements noted among super-regional banks in the coverage.

Strategic Investment and Operating Leverage

Key drivers expected to influence this growth include the roll-off of terminated swaps, which could contribute over 21bps to net interest margin (NIM) through 2027. Additional contributions from back book repricing may add another 15-20bps. Furthermore, investments aimed at enhancing operational productivity can accelerate this momentum, with operational efficiency purported to improve to 58.5% by FY28 compared to 64.5% in FY25.

Anticipated Rise in Deal Activity

With a backdrop of $2.7 trillion in available investment capital, the analysts assert that CFG will be positioned to leverage a resurgence in M&A activity. The expectation for rebounding M&A activities indicates a stronger likelihood of favorable takeout valuations being reflected in stock pricing.

Regulatory Factors and Capital Projections

Poonawala predicts that the Common Equity Tier 1 (CET1) capital could reach 10.25%, although there exists a possibility it may dip below the management's target of 10% to 10.5%. The recommendation is influenced by regulatory changes and the anticipated decline in CFG's stress capital buffer post the 2026 stress test.

Improving Financial Metrics

The net interest margin is projected to steadily improve, estimated to rise to 3.18% in FY26 and further to 3.25% by FY27. These improvements would support CFG's expected revenue growth of 8.8% in FY26 and 5.7% in FY27, outpacing the industry median growth rate of 4.5%.

Current Market Status of CFG

As of the latest updates, Citizens Financial Group's shares have demonstrated resilience, showing an increase of 0.84%, trading at $52.45. Investors are encouraged to anticipate the upcoming earnings report, which is set to be announced soon.

Frequently Asked Questions

What did BofA Securities announce about Citizens Financial Group?

BofA Securities upgraded Citizens Financial from Neutral to Buy, raising the price target significantly.

What is the anticipated ROTCE for Citizens Financial Group?

The ROTCE is expected to improve to 14.6% by 2028, which is one of the highest increases observed in the super-regional banks.

How will deal activity impact Citizens Financial?

Increased deal activity, alongside substantial available capital, can provide growth opportunities, enhancing the stock's attractiveness.

What are the projections for revenue growth?

Revenue growth is forecasted at 8.8% for FY26 and 5.7% for FY27, which significantly exceeds the industry averages.

When is Citizens Financial expected to announce its next earnings report?

The company is set to report its third-quarter results soon, allowing investors to reassess their positions.

About The Author

Olivia Taylor here, a 26-year-old writer and financial advisor. After earning a degree in finance, I worked in the sector for years. I've always loved numbers and had a talent for simplifying difficult financial ideas so that anyone could understand. I wrote my first book because of this passion; it helps readers take charge of their financial futures by fusing real-life stories with useful financial advice.

Whether they are just beginning their careers, preparing for significant life events, or seeking to invest wisely, my goal with my writing is to enable people to make educated financial decisions. The foundation of my work is the conviction that security and freedom of the individual are largely determined by financial literacy. To further financial education, I run workshops and frequently write for financial blogs in addition to my books.

I like to travel, experience other cultures, and find inspiration in daily life when I'm not writing or examining market trends. My passion is utilizing sound financial practices to help people reach their financial objectives and lead the best lives possible.

Contact Olivia Taylor privately here. Or send an email with ATTN: Olivia Taylor as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.