Citigroup (C) Stock Forecast & Price Target

Citigroup has demonstrated a significant increase in headcount, reflecting strategic investments in core operations and regulatory needs, which positions the company for future growth. The projections indicate incremental progress towards its 2026 goals, suggesting enhanced operating leverage, improved return on tangible common equity (ROTCE), and elevated capital returns that are expected to drive above-peer earnings per share (EPS) growth in 2025 and 2026. Additionally, the bank's stock has outperformed the BKX index by 15 percentage points year-to-date and is trading at approximately 1.0 times tangible book value, underscoring increased investor confidence in its financial performance metrics.

The outlook for Citigroup's stock is negatively impacted by a potential decline in its Common Equity Tier 1 (CET-1) ratio from the mid-13% range to the mid-to-high 12% range, which raises concerns about the bank's capital adequacy under regulatory minimums. Additionally, the bank faces significant downside risks related to its ability to improve efficiency and return on tangible common equity (ROTCE), compounded by a challenging regulatory environment and economic factors that could lead to increased losses, particularly in its credit card portfolios due to rising unemployment. Lastly, while severance and simplification costs have trended down, the previously ballooning costs indicate ongoing challenges in operational management that may hinder Citigroup's recovery and performance prospects moving forward.