Citigroup Inc. (NYSE:C) is one of the 10 Best Bank Stocks to Buy in 2026.
On February 9, JPMorgan raised its target price on Citi by 3.1% to $134 (from $130), reiterating its Overweight rating on the stock. This target price change comes as JPMorgan updated its large-cap bank forecasts following the release of the 4th-quarter results.
JP Morgan echoed what it said in its research notes for the other banks in its coverage, stating that it likes bank stocks for this market cycle, because of five factors: (1) Good economic trends, (2) Steady fundamentals, (3) Sticky inflation, which could prevent the US Fed from cutting rates too much in the long term (although he does think the Fed will cut rates twice in 2026), (4) Favorable regulatory environment, and (5) An uptick in bank consolidations, as shown by the recent M&A activity amongst banks.
On January 14, Citi released its Q4 2025 earnings, which were headlined by a 13.5% YoY decline in attributable net income to $2.5 billion (from $2.9 billion). Removing, however, the $1.1 billion net income hit from the sale (which included a $1.6 billion foreign currency translation adjustment) of its Russia unit (approved on December 29), adjusted attributable net income grew 25.8% YoY to $3.6 billion. On a per diluted share basis, earnings grew 29.1% YoY to $1.73 (from $1.34). This earnings growth yielded a 6-basis-point YoY improvement in adjusted return on average assets to 0.52% (from 0.46%) and a 125-basis-point YoY improvement in adjusted return on average common equity to 6.55% (from 5.40%).
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Earnings growth was driven by a 14.1% YoY increase in net interest income (NII) to $15.7 billion (from $13.7 billion), which in turn reflected growth in the bank’s loan book and a modest improvement in its net interest margin (NIM). Gross loans grew 8.3% YoY to $733.0 billion (from $675.9 billion). ~73% of the loan growth is attributable to the commercial loan segment, which increased $42.3 billion YoY (14.0% YoY growth) to $343.7 billion (from $301.4 billion). The rest was from consumer loans, which grew at a more modest pace of $15.4 billion YoY (3.9% YoY growth) to $408.5 billion (from $393.1 billion).
NIMs expanded modestly by 7 basis points to 2.49% (from 2.42%), as the decline in loan yields was offset by higher deposit costs. Citi’s average cost of interest-bearing deposits improved by 51 basis points YoY to 2.83% (from 3.34%), while its average gross loan yield declined by 54 basis points YoY to 8.30% (from 8.84%).
Citigroup Inc. (NYSE:C) is a financial services provider operating in the Commercial Services, Markets, Banking, Wealth, and US Personal Banking segments. The company is based in New York, New York, and was founded in 1812.
