Citi ROTCE targets exclude capital relief, says Morgan Stanley

Morgan Stanley says Citi’s (C) new 14%-15% medium term return on tangible common equity target does not include capital relief. While the lower bounds of Citi’s ROTCE targets are slightly below expectations, the bank is not including capital relief in the targets, the analyst tells investors in a research note. Morgan Stanley adds that Citi’s expense ratio target of less than 55% is better than expected. The renewed $30B buyback authorization suggests Citi is “leaning into buybacks,” the firm adds. It has an Overweight rating on the shares with a $144 price target The stock in morning trading is up 18c to $127.76.