Stephens cuts Citizens Financial stock price target on deposit concerns

Citizens Financial Group (CFG) saw its price target reduced by investment firm Stephens to $65 from $70, while retaining an Equal Weight rating. During the third quarter, the bank's earnings per share rose, beating estimates, driven by lower credit costs and lower-than-expected expenses. However, revenue failed to meet projections, with gross loans up only 0.5% and capital markets fees declining 2.6% quarter-over-quarter.

CFG's current P/E ratio of 12.45 and PEG ratio of 0.31 indicate potential value relative to growth. The firm projected operating earnings per share to reach $5.28 in 2026, $6.50 in 2027 (down less than 1%), and $7.50 in 2028 (down 1%). Stephens now anticipates return on tangible common equity to reach the 16% to 18% range by early-to-mid 2027, with net interest margin expected to surpass 3.30% over the same period.

The company cited slowing private bank deposit growth, intensifying deposit competition, and a widening gap between its forecasted return on assets in 2028 (1.20%) and peers (1.33%) as concerns. These factors suggest the bank's shares may be nearing their full value at the current price.