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Why This is the Best Time to Buy CIT Group (CIT) Stock

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CIT Group Inc.’s (CIT - Free Report) efforts toward streamlining operations in order to improve efficiency are impressive. Given a solid capital position, the company is likely to continue enhancing shareholder value through efficient capital deployment activities.

The company’s Zacks Consensus Estimate for current-year earnings has moved 2.2% upward over the past 30 days, reflecting analysts’ optimism about its earnings growth potential. Thus, the stock currently carries a Zacks Rank #2 (Buy).

Shares of the company have gained 33.1% in a year’s time, outperforming the 21.7% rally for the industry it belongs to. Given the positive estimate revisions and a solid Zacks Rank, the stock should further gain.

Over the past few years, the company has been taking several initiatives to restructure and streamline its operations with the aim of improving efficiency and becoming a regional commercial banking institution. As part of these efforts, it has made several divestures. In June, it announced a deal to sell its European Rail business, while in April the company sold stakes in the joint ventures with Tokyo Century Corporation and divested its aircraft leasing business.

Also, the company’s efforts toward restructuring its balance sheet through repayment and refinancing of high-cost debt should lower its funding cost and continue to support net finance margin growth.

Moreover, given a solid capital position, the company remains well poised to deploy capital meaningfully, thereby continuing to enhance shareholder value.

However, continuously rising expenses are likely to hurt profitability. Though the company is taking several cost-saving initiatives, expenses are expected to remain elevated because of its continued investments in franchise.

Also, deteriorating credit quality and sluggish growth in the industries, where the company provides finance, continue to be key near-term concerns.

A few other top-ranked stocks from the finance space are mentioned below.

The Toronto-Dominion Bank (TD - Free Report) has witnessed an upward earnings estimate revision of 13.2% for the current fiscal year over the past 60 days. Its share price has increased nearly 27% in the past year. It currently sports a Zacks Rank #1 (Strong Buy).

Carolina Financial Corporation (CARO - Free Report) witnessed an upward earnings estimate revision of 4.3% for the current year over the past 60 days. Its share price has increased more than 55% in the past year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The PNC Financial Services Group, Inc. (PNC - Free Report) carries a Zacks Rank #2. Its Zacks Consensus Estimate for the current year has been revised marginally upward in the last 60 days. Its shares have gained 49.3% in the past 12 months.

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