The analyst’s bullishness comes from his positive stance on the restructuring taking place under chief executive officer Jane Fraser. — Bloomberg
NEW YORK: Mike Mayo is doubling down on his bullish call for Citigroup Inc.
The Wells Fargo and Co analyst has already named Citi his top pick among big bank stocks for 2024, replacing JPMorgan Chase and Co as his favourite.
But he took it even further when he said he expects shares to more than double over the next three years as the bank undergoes a “metamorphosis”. Mayo’s base case is for the stock to rise to about US$119 through 2026, which would mark a 131% advance from where it ended 2023. “Investors repeatedly tell us: ‘Don’t talk to me about Citigroup’!” he wrote in a note.
“To us, this negative sentiment creates a more favourable setup for a potential double in the stock over three years.”
If shares rose above US$100, that would mark its highest level since 2008. Citi rose 3.1% on Tuesday, outperforming bank stock peers.
The analyst’s bullishness comes from his positive stance on the restructuring taking place under chief executive officer Jane Fraser.
He already held an “overweight” rating on the stock, and in the latest note boosted his one-year price target to US$70, one of the highest marks on Wall Street, from US$60. “Citigroup is becoming a much more simple and profitable firm, whose earnings should double over the next three years,” Mayo said in a Tuesday afternoon interview on Bloomberg Television. More broadly, equity analysts are divided on what investors should do with Citi shares.
“Citi is undergoing its most significant restructuring in decades,” Mayo wrote.
“We disagree with the many investors who say that Citi is unmanageable, unquantifiable or un-investable.” — Bloomberg
