CIT Group Inc. has been streamlining its operations with a goal to improve efficiency. Over the last few years, the company has divested its Canadian, Brazilian, Mexican and European business lines. These divestitures are part of the company’s strategy to become a regional commercial banking institution.
Further, a positive trend in estimate revisions reflect optimism over the company’s earnings growth prospects. The Zacks Consensus Estimate for CIT Group’s current-quarter earnings has moved up 6.4% over the last 60 days. Also, the current year’s earnings estimates have climbed 3.3%. As a result, the stock currently carries a Zacks Rank #1 (Strong Buy).
Shares of CIT Group have rallied 14.3% year to date, substantially outperforming the industry’s growth of 11.4%.
What Makes CIT Group a Solid Pick?
Restructuring: CIT Group is taking initiatives to simplify operations and become a regional commercial banking institution. Throughout this year, CIT Group has made continued progress in transforming itself. In June, the company announced a deal to sell its European Rail business, while in April it sold stakes in joint ventures with Tokyo Century Corporation and divested its aircraft leasing business. Further, it inked a deal to sell Financial Freedom and the reverse mortgage portfolio this month.
Earnings Strength: While CIT Group’s historical earnings per share (EPS) growth rate of 2.8% compares unfavorably with the industry average of 10%, investors should focus on its projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 55%, substantially higher than the industry average of 10.9%. This drastic improvement is perhaps majorly attributable to the restructuring done by the company over the years.
Further, the company has delivered an average positive earnings surprise of 7.9% in the trailing four quarters.
Impressive Capital Deployment: CIT Group’s capital deployment plan is commendable. Its 2017 capital plan includes a 6.7% dividend hike (beginning third-quarter 2017) and a $225-million share repurchase authorization (through the third quarter of 2018). Given its solid liquidity position and earnings strength, the company should be able to sustain this level of capital deployment.
Favorable ROE: CIT Group’s return on equity (ROE) supports its growth potential. Its ROE of 5.66% compares favorably with the industry’s 5.58% average, implying that it is efficient in using shareholders’ funds.
Stock Looks Undervalued: The stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount.
Also, it looks undervalued with respect to its price-to-sales and price-to-book ratios. The company’s trailing 12-month P/S and P/B ratios of 2.00 and 0.95 are below the industry averages of 2.25 and 1.57, respectively. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
Some better-ranked stocks from the finance space are The Bank of Nova Scotia (BNS - Free Report) , AeroCentury Corp. and Royal Bank of Canada (RY - Free Report) each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of Nova Scotia witnessed an upward earnings estimate revision of 6.5% for the current year, in the last 60 days. Its share price has increased 21% in the past 12 months.
Shares of AeroCentury have gained 51.4% in a year. The Zacks Consensus Estimate for current-year earnings has been revised 9.9% upward over the last 60 days for this leasing company.
Royal Bank of Canada’s current-year earnings estimates have been revised 9.4% upward over the last 60 days. Further, its shares have rallied 25.6% in a year.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
CIT Group Inc. has been streamlining its operations with a goal to improve efficiency. Over the last few years, the company has divested its Canadian, Brazilian, Mexican and European business lines. These divestitures are part of the company’s strategy to become a regional commercial banking institution.
Further, a positive trend in estimate revisions reflect optimism over the company’s earnings growth prospects. The Zacks Consensus Estimate for CIT Group’s current-quarter earnings has moved up 6.4% over the last 60 days. Also, the current year’s earnings estimates have climbed 3.3%. As a result, the stock currently carries a Zacks Rank #1 (Strong Buy).
Shares of CIT Group have rallied 14.3% year to date, substantially outperforming the industry’s growth of 11.4%.
What Makes CIT Group a Solid Pick?
Restructuring: CIT Group is taking initiatives to simplify operations and become a regional commercial banking institution. Throughout this year, CIT Group has made continued progress in transforming itself. In June, the company announced a deal to sell its European Rail business, while in April it sold stakes in joint ventures with Tokyo Century Corporation and divested its aircraft leasing business. Further, it inked a deal to sell Financial Freedom and the reverse mortgage portfolio this month.
Earnings Strength: While CIT Group’s historical earnings per share (EPS) growth rate of 2.8% compares unfavorably with the industry average of 10%, investors should focus on its projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 55%, substantially higher than the industry average of 10.9%. This drastic improvement is perhaps majorly attributable to the restructuring done by the company over the years.
Further, the company has delivered an average positive earnings surprise of 7.9% in the trailing four quarters.
Impressive Capital Deployment: CIT Group’s capital deployment plan is commendable. Its 2017 capital plan includes a 6.7% dividend hike (beginning third-quarter 2017) and a $225-million share repurchase authorization (through the third quarter of 2018). Given its solid liquidity position and earnings strength, the company should be able to sustain this level of capital deployment.
Favorable ROE: CIT Group’s return on equity (ROE) supports its growth potential. Its ROE of 5.66% compares favorably with the industry’s 5.58% average, implying that it is efficient in using shareholders’ funds.
Stock Looks Undervalued: The stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount.
Also, it looks undervalued with respect to its price-to-sales and price-to-book ratios. The company’s trailing 12-month P/S and P/B ratios of 2.00 and 0.95 are below the industry averages of 2.25 and 1.57, respectively. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
Some better-ranked stocks from the finance space are The Bank of Nova Scotia (BNS - Free Report) , AeroCentury Corp. and Royal Bank of Canada (RY - Free Report) each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of Nova Scotia witnessed an upward earnings estimate revision of 6.5% for the current year, in the last 60 days. Its share price has increased 21% in the past 12 months.
Shares of AeroCentury have gained 51.4% in a year. The Zacks Consensus Estimate for current-year earnings has been revised 9.9% upward over the last 60 days for this leasing company.
Royal Bank of Canada’s current-year earnings estimates have been revised 9.4% upward over the last 60 days. Further, its shares have rallied 25.6% in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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