Morgan Stanley analyst Betsy Graseck upgraded Citi to Overweight from Underweight with a price target of $65, up from $46. The firm is increasing its big U.S. bank price targets by a median 16% as it rolls its valuation year from 2024 to 2025 and notes that its new 2025 EPS estimates are a median of 18% higher than its old 2024 estimates. The firm’s expectation that regulators flex Basel Endgame lighter to align with Europe as they strive to reach consensus within the Fed Governors drives an increase in buybacks to optimize CET1 ratios starting in 2025, notes the firm, which calls Citi the “biggest beneficiary” from incremental buybacks as it contends that “buybacks at roughly half of book value are a very accretive financial transaction.”
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