Citigroup's Massive Overhaul Under Jane Fraser Shows Signs Of Paying Off

Bank of America Securities (BofA) reiterated a Buy rating on Citigroup, Inc. C, raising the price forecast from $89 to $100.

According to BofA Securities, Citi’s overhaul remains one of the toughest in the corporate world. Still, recent moves like global consumer exits, de-risking, tech upgrades, and new hires suggest CEO Jane Fraser’s 2022 vision may finally have a real shot at success.

All five of Citi’s business segments have shown improved profitability over the past year.

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Wealth and banking, now under refreshed leadership, have become more focused. Management aims for a 15%–20% Return on Tangible Common Equity (ROTCE) in wealth by 2026, up from an estimated ~10% in FY25.

With a low base, there’s ample room for gains, and Citi is expected to sustainably cross the 10% consolidated ROTCE mark from 2026, BofA Securities writes.

Share repurchases are expected to pick up pace in the second half of 2025, with BofA Securities and consensus forecasting $2.4 billion and $2.1 billion per quarter, respectively.

A more stable regulatory environment should give management greater flexibility on costs after several years of constraint.

Additionally, BofA Securities’ economic outlook points to stronger GDP growth, which could ease credit costs in 2026, supported by reserve assumptions based on a 5.1% weighted average unemployment rate.

BofA Securities notes that the 2026 consensus forecast assumes Citigroup will only meet the low end of its strategic goals, suggesting potential for upward revisions.

BofA Securities raised its FY26 EPS estimate from $9.85 to $10 and increased the price target from $89 to $100, implying 10x 2026 P/E and 0.95x forward P/TBV. It also raised valuation multiples on improved visibility into ROTCE.

Price Action: C shares are trading higher by 2.4% to $84.63 at last check Thursday.

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