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Citizens Financial (CFG)
NYSE:CFG
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Citizens Financial
(NYSE:CFG)
65Neutral
Positive Factors
Earnings
Operating EPS beat expectations due to higher net interest income and better net interest margin.
Financial Guidance
The company increased the high end of their medium term net interest margin guidance, benefiting from fewer rate cuts and a favorable yield environment.
Negative Factors
Asset Quality
Both non-performing assets and net charge-offs increased, particularly driven by an increase in commercial real estate office.
Interest and Deposits
Interest bearing deposit costs were up 4bps Q/Q in 3Q24, partly reflecting incremental mix shift from lower cost IB segments into higher cost IB segments.
Stock Performance
Shares of Citizens – CFG finished down 2.5% vs. +2% for the bank index after reporting 3Q24 core EPS of $0.79 in-line with consensus estimates.
Citizens Financial (CFG) vs. S&P 500 (SPY)
Market Cap
$18.01B
Dividend Yield4.08%
Average Volume (3M)4.80M
Price to Earnings (P/E)13.6
Beta (1Y)1.39
Revenue Growth1.99%
EPS Growth-2.45%
CountryUS
Employees17,287
SectorFinancial
Sector Strength84
IndustryBanks - Regional
Share Statistics
EPS (TTM)3.03
Shares Outstanding437,133,880
10 Day Avg. Volume6,618,641
30 Day Avg. Volume4,797,249
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.47
Price to Cash Flow (P/CF)9.30
P/FCF Ratio3.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.50Price Target Upside26.66% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Citizens Financial Business Overview & Revenue Model
Company DescriptionCitizens Financial Group, Inc. operates as the bank holding company for Citizens Bank, National Association that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States. The company operates in two segments, Consumer Banking and Commercial Banking. The Consumer Banking segment offers deposit products, mortgage and home equity lending products, credit cards, business loans, wealth management, and investment services; and auto, education, and point-of-sale finance loans, as well as digital deposit products. This segment serves its customers through telephone service centers, as well as through its online and mobile platforms. The Commercial Banking segment provides various financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, and interest rate and commodity risk management solutions, as well as syndicated loans, corporate finance, mergers and acquisitions, and debt and equity capital markets services. This segment serves government banking, not-for-profit, healthcare, technology, professionals, oil and gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity, and sponsor finance industries. It operates approximately 1,200 branches in 14 states and the District of Columbia; 114 retail and commercial non-branch offices in national markets; and approximately 3,300 automated teller machines. The company was formerly known as RBS Citizens Financial Group, Inc. and changed its name to Citizens Financial Group, Inc. in April 2014. Citizens Financial Group, Inc. was founded in 1828 and is headquartered in Providence, Rhode Island.
How the Company Makes MoneyCitizens Financial Group generates revenue primarily through interest income from its lending activities, including personal loans, mortgages, and commercial loans. The company also earns non-interest income from various financial services such as deposit account fees, investment management services, and transaction processing. Additionally, CFG benefits from strategic partnerships and collaborations that enhance its product offerings and customer reach. Key factors contributing to its earnings include effective risk management practices, customer relationship management, and technological investments that enhance operational efficiency and customer experience.
Citizens Financial Financial Statement Overview
Summary
Citizens Financial shows moderate revenue growth and a healthy net profit margin. However, declining operational efficiency and inconsistent cash flows present challenges. The balance sheet reflects moderate leverage, but declining ROE suggests reduced efficiency in using equity.Income Statement
Citizens Financial shows moderate revenue growth with a 49.60% increase from 2023 to 2024. The net profit margin is healthy at 12.26% for 2024. However, the EBIT margin has decreased to 14.87% from a high of 46.15% in 2022, indicating reduced operational efficiency.72
Positive
Balance Sheet
The debt-to-equity ratio is 0.51, reflecting moderate leverage. ROE decreased to 6.22% in 2024, a decline from previous years, indicating less efficient use of equity. The equity ratio of 11.15% suggests a stable financial position but could be improved for better resilience.65
Positive
Cash Flow
Free cash flow is inconsistent, with periods of zero or negative values, indicating potential cash management issues. The operating cash flow to net income ratio is unavailable for 2024, suggesting challenges in cash generation relative to reported profits.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.79B | 8.22B | 8.02B | 6.65B | 6.91B | Gross Profit |
| 7.79B | 8.22B | 8.02B | 6.65B | 6.91B | EBIT |
| 1.83B | 2.03B | 3.70B | 2.98B | 1.30B | EBITDA |
| 1.83B | 2.51B | 3.57B | 3.75B | 1.88B | Net Income Common Stockholders |
| 1.51B | 1.61B | 2.07B | 2.32B | 843.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 32.61B | 41.70B | 34.86B | 35.54B | 35.98B | Total Assets |
| 217.52B | 221.96B | 226.73B | 188.41B | 183.35B | Total Debt |
| 12.40B | 13.97B | 15.89B | 7.01B | 8.59B | Net Debt |
| 12.40B | 1.94B | 5.04B | -2.47B | -4.45B | Total Liabilities |
| 193.27B | 197.62B | 203.04B | 164.99B | 160.68B | Stockholders Equity |
| 24.25B | 24.34B | 23.69B | 23.42B | 22.67B |
| Cash Flow | Free Cash Flow | |||
| 1.88B | 2.79B | 3.99B | 2.15B | -7.00M | Operating Cash Flow |
| 2.00B | 2.96B | 4.12B | 2.27B | 111.00M | Investing Cash Flow |
| 2.99B | 5.25B | -12.64B | -10.49B | -6.14B | Financing Cash Flow |
| -6.01B | -7.13B | 9.91B | 4.64B | 15.37B |
Citizens Financial Technical Analysis
Positive
42.24
Price Trends
44.84
Negative
44.84
Negative
41.81
Positive
Market Momentum
-1.12
Negative
46.69
Neutral
79.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFG, the sentiment is Positive. The current price of 42.24 is above the 20-day moving average (MA) of 42.23, below the 50-day MA of 44.84, and above the 200-day MA of 41.81, indicating a neutral trend. The MACD of -1.12 indicates Negative momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 79.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CFG.
Citizens Financial Risk Analysis
Citizens Financial disclosed 36 risk factors in its most recent earnings report. Citizens Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Citizens Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $21.94B | 12.31 | 9.93% | 4.13% | 10.13% | -1.25% | |
71 Outperform | $68.71B | 12.64 | 11.10% | 3.66% | 7.24% | 7.51% | |
71 Outperform | $20.16B | 11.23 | 10.72% | 4.51% | 2.70% | -8.16% | |
67 Neutral | $26.38B | 12.59 | 11.92% | 3.65% | 11.21% | -2.26% | |
65 Neutral | $18.01B | 13.62 | 6.21% | 4.08% | 1.99% | -2.45% | |
64 Neutral | $14.46B | 10.12 | 8.75% | 4.25% | 17.00% | -11.86% | |
54 Neutral | $17.85B | 1,663.64 | -0.99% | 5.08% | -11.11% | -133.79% |
* Financial Sector Average
Performance Comparison
CFG
Citizens Financial
42.24
8.80
26.32%
FITB
Fifth Third Bancorp
40.25
5.53
15.93%
HBAN
Huntington Bancshares
15.35
2.57
20.11%
KEY
KeyCorp
16.57
2.24
15.63%
PNC
PNC Financial
176.54
27.02
18.07%
RF
Regions Financial
22.27
3.20
16.78%
Citizens Financial Earnings Call Summary
Earnings Call Date: Jan 17, 2025 | % Change Since: -8.95% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong NIM expansion, revenue growth, and favorable credit trends. However, challenges such as subdued loan demand and higher expense growth were also noted. Overall, the highlights significantly outweighed the lowlights.Highlights
Strong NIM Expansion and Revenue Growth
The company achieved a 10 basis points expansion in net interest margin (NIM), driving a sequential net interest income (NII) growth of 3%. Fees grew sequentially by 6%, paced by capital markets and mortgage.
Positive Operating Leverage
The company delivered positive operating leverage of around 50 basis points, even with a 3.5% expense growth due to strategic hiring.
Favorable Credit Trends
Non-performing assets (NPAs) decreased sequentially, and criticized assets trended downwards with no surprises in charge-offs.
Private Bank Achievements
The Private Bank reached $7 billion in deposits, $3.1 billion in loans, and $4.7 billion in assets under management and was profitable in the quarter.
Successful Share Repurchase
The company repurchased $225 million in shares during the quarter, totaling $1.05 billion for the year, representing 6% of the beginning-of-year balance.
Strong Capital Position
CET1 ratio strengthened to 10.8%, with a pro forma Category 1 Liquidity Coverage Ratio (LCR) of 119%.
Lowlights
Subdued Loan Demand
Despite positive financial results, the company experienced subdued loan demand, which led to contraction in loan balances.
Higher Expense Growth
Expenses increased by 3.5% due to hiring in private bank and commercial middle-market sectors.
Decline in Commercial Loans
Average loans were down slightly, and period-end loans decreased by 1.7% linked quarter, reflecting a decline in commercial loans due to paydowns in C&I and CRE.
Company Guidance
During the Citizens Financial Group Q4 2024 earnings call, the company provided optimistic guidance for 2025, noting several key metrics. Net interest income (NII) is projected to grow by 3% to 5% due to further net interest margin (NIM) expansion, aiming for around 3%. Fee income is expected to increase by 8% to 10%, driven by capital markets and wealth management. Operating expenses are anticipated to rise by approximately 4%, with a focus on strategic investments in growth initiatives, while maintaining positive operating leverage of around 1.5%. Credit costs are expected to improve, with net charge-offs projected in the range of $650 million to $700 million, and the allowance for credit losses (ACL) ratio is expected to continue seeing releases throughout the year. The company plans to maintain its Common Equity Tier 1 (CET1) ratio above 10.5% to 10.75%, ensuring a strong capital position amid macroeconomic uncertainties. Citizens Financial Group is also targeting a medium-term return on tangible common equity (ROTCE) of 16% to 18%, supported by strategic initiatives like the expansion of the private bank, which is expected to be 5% accretive to the bottom line by 2025.Citizens Financial Corporate Events
Financial Disclosures
Citizens Financial Reports Strong 2024 Financial Performance
Positive
Jan 17, 2025
Citizens Financial Group, Inc. reported its financial results for the fourth quarter of 2024, with a net income of $401 million and an earnings per share (EPS) of $0.83. The company’s underlying net income for the same period was $412 million with an EPS of $0.85. For the year 2024, the company achieved a net income of $1.5 billion and an EPS of $3.03. Key financial metrics highlighted include a CET1 ratio of 10.8% and a loan-to-deposit ratio of 79.6%. The results reflect a strong liquidity profile and stable average deposits.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.