BofA Securities analyst Ebrahim H. Poonawala upgraded Citizens Financial Group, Inc. (NYSE:CFG) to Buy from Neutral and raised the price target to $65 from $52.
CFG is trading at elevated levels. See the full breakdown here.
The analyst estimates a 300bps+ improvement in ROTCE (Return on Tangible Common Equity) by 2028, reaching 14.6%, one of the largest increases across its super-regional bank coverage.
Poonawala expects ROTCE to benefit from the roll-off of terminated swaps (+21bps to NIM through 2027) and back book repricing (+15bps to +20bps).
Also, operating leverage from recent investments, and a focus on boosting franchise productivity (efficiency ratio improving to 58.5% by FY28 vs. 64.5% in FY25) can act as tailwinds.
CFG is poised to benefit from a rebound in deal activity, with $2.7 trillion in available investment capital, writes the analyst.
Poonawala estimates CET1 capital at 10.25%, though it may decrease below the management target of 10%-10.5%. The analyst cites regulatory changes and CFG’s stress capital buffer dropping after the 2026 stress test as reason.
He expects net interest margin to improve steadily, reaching 3.18% in FY26 and 3.25% in FY27.
The analyst forecasts revenue growth of 8.8% in FY26 and 5.7% in FY27, above the peer median of 4.5%.
Also, rebounding bank M&A could increase the likelihood of takeout options being priced into the stock, says the analyst.
Citizens Financial Group will report its third quarter 2025 results on Oct. 15, 2025.
CFG Price Action: Citizens Financial Group shares are up 0.84% at $52.45 at publication on Thursday.
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