Citizens Has Executed Well In More Challenging Circumstances

Back in June, I thought that Citizens Financial (CFG) had some appealing countercyclical and self-help value, but that it wasn’t quite as attractively valued as Bank of America (BAC), First Horizon (FHN), or JPMorgan (JPM). Since then, the shares have outperformed the average bank stock, but underperformed those three preferred names. Still, with better than expected growth guidance for 2020 and opportunities for both positive leverage and improved capital returns, I think Citizens is going into 2020 in very good shape.

Given those relative performance dynamics, I think Citizens is a little more attractively priced now, as well as undervalued on a fundamental basis. There are still things management needs to work on (including balance sheet optimization), but those plans are underway and I think Citizens should trade in the low-to-mid-$40’s.

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Citizens Has Executed Well In More Challenging Circumstances