Last Update 31 Oct 25

Fair value Increased 0.41%

The analyst price target for Citizens Financial Group has increased slightly to $61.73. This reflects analysts' expectations for improved profit margins, along with ongoing strength in capital markets and fee income.

Analyst Commentary

Recent analyst activity surrounding Citizens Financial Group has included a number of upward revisions to price targets, as well as additional ratings upgrades. These changes reflect evolving views on the company's profitability prospects, business momentum, and valuation compared to peers.

Bullish Takeaways

Bullish analysts have consistently increased their price targets, citing improved profitability, effective capital markets performance, and ongoing fee generation as key drivers for near-term and long-term upside.
The company's net interest income growth and strength in fee income have contributed to quarterly earnings results that have either met or exceeded expectations, reinforcing positive momentum in execution.
Citizens Financial is considered one of the strongest profitability improvement stories in the sector. Expectations for its return on tangible common equity suggest it could close the gap versus peers and approach its medium-term target range.
The discount at which Citizens Financial currently trades relative to sector peers is regarded as attractive. Several upcoming catalysts in the next 12 months are identified as potential drivers of further upside to valuation.

Bearish Takeaways

Bearish analysts urge selectivity following the recent rally in bank shares. They caution that while recent gains have been robust, further outperformance may be contingent on broader sector conditions and successful execution of strategic initiatives.
Some updates to models, including expectations around mortgage fees and preferred dividend schedules, reflect a more measured stance. This has resulted in Hold or Equal Weight ratings despite upward target revisions.
While recent earnings have been solid, concerns linger around sustaining momentum, especially if middle-market lending or net interest margin growth underperforms expectations amid changes in market conditions.
Recent decreases in the prime lending rate may have a mixed impact. While these changes support borrowers, they could compress margins if broader loan growth does not accelerate as anticipated.

What's in the News

Citizens Financial has decreased its prime lending rate twice in recent months. The rate was first reduced to 7.25 percent in September and then to 7.00 percent in October, reflecting adjustments to borrowing costs (Periodicals).
The company provided earnings guidance for the fourth quarter of 2025, anticipating net interest income growth of approximately 2.5 to 3 percent. This outlook is driven by improvements in net interest margin and slight increases in interest-earning assets (Key Developments).
Aunoy Banerjee has been appointed as the new Chief Financial Officer. He brings extensive experience from Barclays, State Street, and Citi, with the transition taking effect in October 2025 (Key Developments).
The board of directors declared a quarterly dividend of $0.46 per share, representing a 9.5 percent increase from the prior quarter. The dividend is payable in November 2025 (Key Developments).

Valuation Changes

Consensus Analyst Price Target has risen slightly, increasing from $61.48 to $61.73.
Discount Rate has edged up from 6.97 percent to 7.00 percent.
Revenue Growth expectations have declined modestly from 11.99 percent to 11.95 percent.
Net Profit Margin has improved, moving from 27.60 percent to 27.96 percent.
Future P/E ratio has decreased slightly, from 10.53x to 10.46x.

Advanced technology adoption, digital product expansion, and strategic market growth position Citizens for higher efficiency, stable earnings, and greater revenue diversification.
Focus on high-quality lending, optimized deposit mix, and strong capital enables resilience to market headwinds and opportunities to gain market share.
Heavy exposure to commercial real estate, technological lag, regional concentration, and increased regulatory pressure threaten long-term profitability and competitive positioning.

Catalysts

About Citizens Financial Group

Operates as the bank holding company that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations, and institutions in the United States.What are the underlying business or industry changes driving this perspective?

The company's "Reimagining the Bank" initiative-focused on deploying advanced technologies such as AI and automation across customer service, operations, and risk management-is expected to unlock significant cost efficiencies and improve customer experience; these efforts are likely to drive down operating expenses, improve the efficiency ratio, and enhance net margins in the long term.
The build-out of Citizens' Private Bank and expansion into high-growth markets (New York Metro, Florida, California) is scaling well, with rising deposits, robust loan growth, and an increasing share of fee-based assets under management, likely to provide sustainable revenue diversification and accretive impacts to net earnings and ROE over the next several years.
Citizens' proactive rotation from noncore and higher-risk portfolios into high-quality, relationship-driven lending (HELOC, Private Bank, C&I) and effective deposit mix optimization-especially growing non-interest-bearing and low-cost relationship deposits-positions the bank for ongoing net interest margin (NIM) expansion and more stable long-term earnings growth despite potential interest rate headwinds.
The ongoing shift in customer preferences toward digital, tech-enabled banking aligns with Citizens' investment strategy, including the rollout of new digital products (e.g., competitive, mass affluent credit cards and enhanced digital banking), which should attract younger demographics, support deposit growth, and drive higher fee and payment-related revenue.
Industry-wide consolidation is creating opportunities for well-capitalized, efficiently run regional banks like Citizens to gain market share and leverage scale efficiencies, with Citizens' strong capital position enabling both continued share repurchases and selective growth investments, likely resulting in improved top-line growth and long-term shareholder value.

Citizens Financial Group Earnings and Revenue Growth

Citizens Financial Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Citizens Financial Group's revenue will grow by 12.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 20.2% today to 27.3% in 3 years time.
Analysts expect earnings to reach $2.8 billion (and earnings per share of $6.16) by about September 2028, up from $1.5 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.0x on those 2028 earnings, down from 15.4x today. This future PE is lower than the current PE for the US Banks industry at 11.9x.
Analysts expect the number of shares outstanding to decline by 2.12% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.11%, as per the Simply Wall St company report.

Citizens Financial Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Citizens Financial Group's significant exposure to commercial real estate, especially office properties, remains a structural risk; while reserves have recently trended down, any renewed downturn in commercial real estate values could elevate non-performing loan ratios and drive up credit losses, which would negatively impact net earnings and margins.
Despite ongoing investments, the company's digital transformation initiatives may lag behind larger, more technologically sophisticated banks and fintech competitors; this relative underinvestment could result in increased customer attrition and slow fee-based revenue growth, pressuring long-term margins and overall earnings.
Geographic concentration in the Northeast and Midwest exposes Citizens to localized economic or demographic stagnation; if population trends and regional economic growth remain tepid or decline in these areas, organic loan and deposit growth could underperform, constraining revenue and limiting long-term profitability.
Heightened regulatory scrutiny and the potential for stricter capital requirements-especially following recent industry turbulence-may force Citizens to retain more capital, potentially reducing return on equity, restricting lending capacity, and impeding top-line revenue and earnings expansion.
Ongoing industry consolidation and intensifying competition among regional banks could pressure Citizens to engage in potentially value-dilutive M&A or price aggressively to maintain share, leading to compressed net interest margins and lower long-term profits.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $56.45 for Citizens Financial Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $65.0, and the most bearish reporting a price target of just $51.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $10.3 billion, earnings will come to $2.8 billion, and it would be trading on a PE ratio of 10.0x, assuming you use a discount rate of 7.1%.
Given the current share price of $51.71, the analyst price target of $56.45 is 8.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

CFG: Net Interest Margin And Fee Income Gains Will Drive Upside Momentum