Citigroup: Undervalued Restructuring Story with Improving Profitability Supports Buy Rating and $140 Target

Citigroup, the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Ebrahim Poonawala from Bank of America Securities reiterated a Buy rating on the stock and has a $140.00 price target.

Ebrahim Poonawala has given his Buy rating due to a combination of factors tied to Citigroup’s recent performance and outlook. He highlights that the bank delivered better‑than‑expected core earnings, supported by solid net interest income growth and improving credit costs, even though fee income was softer. While he modestly trims future EPS estimates on a more conservative view of fee growth, he still expects healthy revenue expansion in 2026 driven by higher net interest income, continued market‑share gains in banking, and stable to slightly improving markets revenues. He also notes that Services, despite already being a strong franchise, should continue to add incremental growth.

Poonawala further emphasizes that the market’s negative reaction appears excessive given the underlying fundamentals and Citi’s progress in restructuring the franchise. He points out that the shares trade at a significant discount to peers on both tangible book value and earnings, despite expectations for double‑digit returns on tangible common equity over the next two years and a clear trajectory for further improvement. Ongoing remediation of regulatory issues, steady revenue growth since 2021, and management’s forthcoming investor day—where a path toward 13%+ ROTCE over the medium term is expected to be outlined—support his constructive view. Taken together, the combination of improving profitability, strategic execution, and an undemanding valuation underpins his Buy rating and $140 price objective.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $146.00 price target.