"Overall, we expect ROTCE to continue to grind higher as management continues to execute on its plan to grow revenues, invest in the business while keeping expenses controlled and returning capital to shareholders," analyst Jill Shea wrote in a note.
Shea raised 2017 and 2018 EPS estimates to $2.05 and $2.30 — from a previous $1.98 and $2.22 — to reflect potential operating leverage.
"We are now forecasting ~350 bps of positive operating leverage in 2016 (helped by the December hike) and ~200bps in 2017E, with revenue growth of 6 percent and 4 percent, respectively," Shea continued.
The analyst maintains the Neutral rating on the stock, while the $27 price target reflects 12.7 times 2017 EPS and 1.0 times 12 month forward tangible book value relative to the expectations of ROTCE in the low-8 percent range by YE17.
At time of writing, shares of Citizens Financial were up 1.36 percent at $24.91.
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