Citi Downgrades CIT Group Amid 'Weak Core Business'

CIT Group Inc. CIT shares have declined 41.11 percent over the past six months, down to its 52-week low on February 2, at $27.70.
Citi’s Donald Fandetti has downgraded the rating on the company from Buy to Neutral, while lowering the price target to $30.
Fandetti explained he was moving to the sidelines due to the company’s “weak core business” and energy related risks.

Analyst Donald Fandetti explained that the downgrade was based on expectations that “1) energy will remain a headwind, 2) core business fundamentals are soft and 3) we see risk of further negative earnings revisions.”

Fandetti also mentioned that with the stock having underperformed the BKX, it no longer offered a compelling enough case to justify a Buy rating, especially given the overhang due to CIT Group’s energy exposure.

“CIT’s overall energy risk is modest, but it’s enough to keep pressure on the net finance margin and credit metrics into 2016,” Fandetti said.

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