“We consider Citi’s turnaround as among the most complex in the corporate world, but Fraser had undertaken actions (such as international consumer exits, balance sheet de-risking, tech/personnel investments, streamlining businesses, hiring external talent) that gives Citi a fighting chance of becoming competitive, in our view,” Poonawala wrote in the note. Poonawala reiterated a “Buy” rating for Citi and boosted his price target to $100 from $89.
Over the past year, Citi’s five businesses are tracking improved profitability, Poonawala said, adding that wealth and banking have acquired a sharper focus under new leadership. Absent a severe macroeconomic shock, the analyst expects Citi’s momentum to continue, “paving the way for management to deliver a more than 10% return on tangible common equity (ROTCE) on a sustainable basis starting in 2026.” ROTCE is a metric used to compare banks and how well they are using tangible common equity to generate profits.
In the first quarter, Citi’s efficiency ratio in each of its core business units declined versus the year ago quarter, Poonawala said. This reflects management’s focus on controlling expenses, he said.
