Citigroup (C) Stock Forecast & Price Target

Citigroup has experienced a significant increase in headcount due to core investments and expansion, positioning itself for further growth. The bank is projected to show expanding operating leverage and improved return on tangible common equity (ROTCE), which should facilitate above-peer earnings per share (EPS) growth in 2025 and 2026. Additionally, Citigroup's services and markets segments are outperforming revenue growth targets, contributing to enhanced confidence in its financial performance and valuation metrics.

Citigroup's capital position, as indicated by its CET-1 ratio, is projected to decline from mid-13% to mid-to-high 12% next year, raising concerns about the bank's financial stability under new regulatory minimum requirements. Furthermore, the bank faces significant risks associated with its inability to improve operational efficiency, coupled with challenges posed by a potentially harsher regulatory environment and increasing unemployment levels, which could lead to greater losses in its credit card portfolios. Additionally, Retail Services has struggled with shrinking spending volumes over the past ten quarters and a recent decline in loan balances, suggesting ongoing headwinds for growth in this segment.