Citigroup (C) Stock Forecast & Price Target

Citigroup's positive outlook is supported by a recent increase in headcount, which reflects the company’s commitment to core investments and regulatory requirements, signaling growth potential. This growth is expected to translate into expanding operating leverage, enhanced Return on Tangible Common Equity (ROTCE), and elevated capital returns, which collectively position Citigroup for above-peer earnings per share (EPS) growth in 2025 and 2026. Furthermore, the shares have demonstrated strong performance, outpacing the BKX index by 15 percentage points year-to-date and achieving a trading value at approximately 1.0 times tangible book value for the first time in years, indicating strengthened investor confidence.

Citigroup's Common Equity Tier 1 (CET1) ratio is projected to decline from mid-13% to mid-to-high 12% next year, indicating potential weaknesses in its capital position amid regulatory pressures. The bank faces significant headwinds including challenges in executing on efficiency improvements and return on tangible common equity (ROTCE), as well as risks from a more stringent regulatory environment and economic deterioration impacting credit card losses. Additionally, while severance and simplification costs have decreased recently, the accumulated financial strain may hinder the bank's overall performance and profitability going forward.