CFG - Citizens Financial Q4: Remains Attractive As The Swap Headwind Nears Its Peak
2024-01-31 15:08:39 ET
Summary
- Shares of Citizens Financial Group have underperformed, but have returned about 40% since my previous buy recommendation.
- The bank's net interest income has been squeezed, leading to a decline in revenue and a narrower net interest margin, but this pressure should fade by midyear.
- Citizens has achieved its targeted liquidity level, and credit quality is reasonable even as the economic cycle ages.
- Its strong capital position allows it to repurchase shares.
Shares of Citizens Financial Group ( CFG ) have been a material underperformer over the past year, losing 19%. Like many regional banks, CFG has been hit with higher funding costs, which exacerbated headwinds from its fixed-rate swap positions, as discussed in my October write-up. Since that buy recommendation, shares have returned about 40%, surpassing my low-$30’s price target, making now an opportune time to revisit the company. I remain bullish CFG....
Citizens Financial Q4: Remains Attractive As The Swap Headwind Nears Its Peak