Trying to figure out stocks like Citizens Financial (CFG)
might be why I have more than my fair share of grey hair, as there are a
lot of intriguing and attractive aspects to the story (including the
valuation), but almost as many challenges and issues that may make an
investor pause. Although Citizens is one of the largest banks in the
country (#13 in assets) and operates in 11 states, it doesn’t really
have great deposit share in its biggest MSAs, nor attractively-priced
deposits. Likewise, Citizens has done a lot to improve its
profitability, but that includes shifting the loan mix towards some
riskier categories and that could have repercussions when the credit
cycle turns.
On balance, I do think Citizens is
worth a close look, maybe if for no other reason than it is likely to be
one of the stronger large banks in terms of pre-provision earnings
growth over the next two to three years and challenges in categories
like CRE aren’t too relevant.
Click here for more:
Citizens Financial An Intriguing Mix Of Opportunity And Challenges
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