Citi reaction to regulatory risk ‘may have been overdone,’ says Evercore ISI

Evercore ISI raised the firm’s price target on Citi to $64 from $63 and keeps an In Line rating on the shares. While results were “strong” and management reiterated FY24 guidance, some concerns over Citi’s ability to hit medium-term return targets and regulatory tail risk sent the shares down 5% yesterday, notes the analyst, who thinks the reaction “may have been overdone.” The firm, however, sees “reasonable concerns” on how the return gap closes when Markets, Banking, and U.S. Private Banking turned in strong revenue quarters, but “only had ROTCEs of 7.9%, 4.33%, and 8.03% respectively to show for it.”