Citizens Financial Group: A Mixed Bag of Performance Amid Rising Challenges
Providence, Rhode Island-based Citizens Financial Group, Inc. (CFG) currently holds a market cap of $19.1 billion, making it one of the largest retail bank holding companies in the United States. The firm offers a variety of banking products and services for individuals, small businesses, middle-market companies, and institutions.
Companies valued at more than $10 billion fall under the “large-cap” category, and Citizens Financial meets this definition. The bank operates primarily in the New England, Mid-Atlantic, and Midwest regions, servicing a diverse customer base through its branches, call centers, and online services.
Recent Performance: Short-Term Struggles Amid Long-Term Gains
CFG has experienced an 11.8% decline from its 52-week high of $49.25. However, shares have risen 4.3% over the last three months, although this growth trails behind the Nasdaq Composite’s ($NASX) 9.1% return in the same period.
On a year-to-date basis, CFG stock has climbed 31.1%, a slight edge over NASX’s 30.4% gains. Furthermore, over the past 52 weeks, CFG’s stock has surged 34.2%, surpassing NASX’s 32.4% returns.
Since last year, CFG has consistently traded above its 200-day moving average, with only minor fluctuations. The stock has also remained above its 50-day moving average throughout this period.
Q3 Results Raise Red Flags
On October 16, CFG shares dropped 2.5% in response to disappointing Q3 results that raised concerns about operational performance. Although the adjusted earnings per share (EPS) of $0.79 met estimates, revenues of $1.9 billion fell short of the consensus. Additionally, net income decreased by 11.2% year-over-year to $382 million, driven by lower net interest income and a shrinking net interest margin.
The bank is also facing pressures from declining loan and deposit balances, along with concerns about deteriorating credit quality, exemplified by higher net charge-offs and an increase in non-accrual loans.
Competitive Landscape and Analyst Perspectives
In comparison, CFG has outperformed competitor Fifth Third Bancorp (FITB), which saw a 26.2% growth over the past year and a 24.5% increase YTD.
Despite CFG’s relative outperformance compared to the broader market last year, analysts are remaining cautiously optimistic. The stock currently holds a consensus rating of “Moderate Buy” from 20 analysts. It trades below the average price target of $51.18.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
