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Citizens Financial Rises Nearly 42% in a Year: Is It Worth Buying Now?
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Key Takeaways
CFG shares jumped 41.5% in a year, outperforming the industry and peers like Bank OZK and Webster Financial.
CFG is expanding wealth management, with its private bank surpassing targets in deposits, loans and AUM.
CFG expects 10-12% NII growth in 2026, supported by rate trends, loan demand and margin expansion.
Citizens Financial Group, Inc.’s (CFG - Free Report) shares have rallied 41.5% in the past year, outperforming the industry’s 19% rise. Further, CFG’s price performance has been better than that of its peers, Bank OZK (OZK - Free Report) and Webster Financial Corporation (WBS - Free Report) , which have gained 3.2% and 33.9%, respectively, in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Following the recent surge, does CFG stock still offer upside potential? Let’s take a closer look.
What’s Aiding CFG’s Performance?
Wealth Management Expansion to Drive Growth: The company is advancing its long-term strategy through expansion in wealth management and key markets, along with enhanced capabilities for high-net-worth clients. The launch of Citizens Private Bank in October 2023 has strengthened its wealth platform, with the business surpassing its targets by reaching over $12 billion in deposits, $7 billion in loans and $10 billion in assets under management (AUM) by the end of 2025. The segment also contributed 7% to 2025 earnings, exceeding the initial 5% target.
Looking ahead, the private banking business is expected to deliver mid-teens earnings contribution while maintaining a return on equity (ROE) of 20-25%. By 2026, it is projected to drive growth, with deposits targeted at $18-$20 billion, loans at $11-$13 billion and client assets at $16-$20 billion. Further, continued expansion across the New York Metro, Florida and California markets, along with investments in payments capabilities and commercial middle-market coverage, is likely to support the company’s broader wealth strategy.
2026 Private Bank Targets
Image Source: Citizens Financial Group, Inc.
Organic Growth Momentum: Citizens Financial has continued to exhibit steady organic growth, supported by a rise in revenues. Over the last five years (2020-2025), the company’s total revenues recorded a compound annual growth rate (CAGR) of 3.6%. This growth was primarily driven by net interest income (NII), which witnessed a CAGR of 5%, while non-interest income declined at a CAGR of nearly 1% during the same period, reflecting some pressure on fee-based businesses.
Going forward, net interest margin expansion, modest growth in interest-earning assets and decent loan demand are expected to support NII growth. The Federal Reserve reduced rates by 100 basis points in 2024 and 75 basis points in 2025, and kept the federal funds rate at 3.50%-3.75% in its March 2026 Federal Open Market Committee meeting. With a potential rate cut indicated for 2026, the relatively lower rate environment is expected to encourage borrowing, support loan growth and drive earning asset expansion, thereby aiding NII growth. Additionally, improving fee-based business performance is likely to support non-interest income. Management expects NII to rise 10-12% and non-interest income to increase 6-8% in 2026 from the 2025 reported levels, supporting overall revenue growth in the near term.
The Zacks Consensus Estimate for CFG’s 2026 and 2027 revenues is pegged at $8.9 billion and $9.7 billion, which indicates year-over-year growth of 8.9% and 8.3%, respectively.
Revenue Estimates
Image Source: Zacks Investment Research
Strategic Initiative to Drive Efficiency: The company is undertaking its multi-year “Reimagine the Bank” initiative to streamline operations, enhance productivity and support long-term growth. The program focuses on operational redesign, technology modernization, risk optimization and business simplification, with increased use of automation and artificial intelligence (AI) capabilities.
The initiative is expected to lower costs, improve efficiency and enhance customer experience. Management projects a pre-tax benefit of nearly $450 million by 2028, primarily driven by expense savings. The program is also expected to become meaningfully accretive, supporting operating leverage and enhancing profitability, with more than 2% uplift in return on tangible common equity (ROTCE) by 2028.
Expected Pre-Tax Benefit
Image Source: Citizens Financial Group, Inc.
Loan & Deposit Growth Strength: The company maintains a healthy loan and deposit base, reflecting steady balance sheet growth. Over the last five years (2020-2025), loans and leases and deposits recorded a CAGR of 3.1% and 4.5%, respectively. CFG has been enhancing its deposit franchise by strengthening its deposit-gathering capabilities, supported by acquisitions such as HSBC branches and Investors Bancorp in 2021, which added low-cost deposits and expanded its branch network.
Management’s focus on relationship-based lending and attractive risk-adjusted returns is expected to support loan pipelines. Additionally, the sale of $1.9 billion of non-core education loans in the first quarter of 2025 is likely to reduce wholesale funding costs and support organic loan growth in its core portfolio.
Decent Liquidity Supports Capital Distribution: CFG maintains a decent liquidity position. As of Dec. 31, 2025, the company had $13.7 billion in available liquidity against $11.2 billion in long-term debt and $58 million in short-term debt.
Given this strength, Citizens Financial continues to return capital through share repurchases. In June 2025, the board approved an increase in its common share repurchase program to $1.5 billion. As of Dec. 31, 2025, $1.3 billion remained available under the program.
Apart from repurchases, the company has been consistently paying dividends. In October 2025, Citizens Financial raised its dividend by 9.5% to 46 cents per share. It has increased its dividend three times over the past five years while maintaining a payout ratio of 48%. Further, its dividend yield of 3.20% compares favorably with the industry’s 2.78%. Notably, the dividend yields of CFG’s peers, Bank OZK and Webster Financial, are 4.11% and 2.36%, respectively.
Dividend Yield
Image Source: Zacks Investment Research
Few Concerns for Citizens Financial
Elevated Expense Base: The company continues to face expense pressure, with non-interest expenses witnessing a CAGR of 5.9% over the last five years (2020-2025). While management is taking steps to improve efficiency and drive operating leverage, costs are expected to remain elevated in the near term.
The opening of private banking offices, national franchise expansion and ongoing investments in technology are likely to keep the expense base high, potentially limiting margin expansion in the near term. Management expects adjusted non-interest expenses to grow 4-5% in 2026 from the 2025 reported level.
Expense Trend
Image Source: Zacks Investment Research
Loan Concentration Risk: Citizens Financial’s loan portfolio remains heavily concentrated toward commercial loans, which accounted for 51.7% of total loans and leases as of Dec. 31, 2025.
Given the uncertain macroeconomic environment, this concentration may expose the company to higher credit risks. In the event of an economic downturn, asset quality could deteriorate and the lack of diversification may adversely impact its financial performance.
How to Approach CFG Stock Now?
In terms of valuation, CFG stock appears expensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings P/E ratio of 10.7X, higher than the industry’s 9.1X. Meanwhile, Bank OZK holds a P/E ratio of 7.2X, while Webster Financial’s P/E ratio stands at 9.9X.
Price-to-Earnings F12 M
Image Source: Zacks Investment Research
While the premium valuation, elevated expense base and loan concentration risk may raise some near-term concerns, these risks appear manageable given CFG’s decent liquidity position, expanding wealth-management franchise and ongoing efficiency initiatives under its “Reimagine the Bank” program.
Moreover, the Zacks Consensus Estimate for earnings per share has been revised upward to $5.08 for 2026 and $6.20 for 2027 over the past 60 days. This reflects analysts' optimism regarding the company’s earnings growth trajectory.
Estimates Revision Trend
Image Source: Zacks Investment Research
Overall, Citizens Financial stands out as a compelling choice for investors seeking exposure to a well-managed regional bank with expanding wealth-management capabilities, improving profitability trends and consistent capital-return initiatives. Hence, investors can consider investing in this Zacks Rank #2 (Buy) stock now to generate healthy long-term returns.
View the Zacks #1 Rank List
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Citizens Financial Rises Nearly 42% in a Year: Is It Worth Buying Now?
Key Takeaways
Citizens Financial Group, Inc.’s (CFG - Free Report) shares have rallied 41.5% in the past year, outperforming the industry’s 19% rise. Further, CFG’s price performance has been better than that of its peers, Bank OZK (OZK - Free Report) and Webster Financial Corporation (WBS - Free Report) , which have gained 3.2% and 33.9%, respectively, in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Following the recent surge, does CFG stock still offer upside potential? Let’s take a closer look.
What’s Aiding CFG’s Performance?
Wealth Management Expansion to Drive Growth: The company is advancing its long-term strategy through expansion in wealth management and key markets, along with enhanced capabilities for high-net-worth clients. The launch of Citizens Private Bank in October 2023 has strengthened its wealth platform, with the business surpassing its targets by reaching over $12 billion in deposits, $7 billion in loans and $10 billion in assets under management (AUM) by the end of 2025. The segment also contributed 7% to 2025 earnings, exceeding the initial 5% target.
Looking ahead, the private banking business is expected to deliver mid-teens earnings contribution while maintaining a return on equity (ROE) of 20-25%. By 2026, it is projected to drive growth, with deposits targeted at $18-$20 billion, loans at $11-$13 billion and client assets at $16-$20 billion. Further, continued expansion across the New York Metro, Florida and California markets, along with investments in payments capabilities and commercial middle-market coverage, is likely to support the company’s broader wealth strategy.
2026 Private Bank Targets
Image Source: Citizens Financial Group, Inc.
Organic Growth Momentum: Citizens Financial has continued to exhibit steady organic growth, supported by a rise in revenues. Over the last five years (2020-2025), the company’s total revenues recorded a compound annual growth rate (CAGR) of 3.6%. This growth was primarily driven by net interest income (NII), which witnessed a CAGR of 5%, while non-interest income declined at a CAGR of nearly 1% during the same period, reflecting some pressure on fee-based businesses.
Going forward, net interest margin expansion, modest growth in interest-earning assets and decent loan demand are expected to support NII growth. The Federal Reserve reduced rates by 100 basis points in 2024 and 75 basis points in 2025, and kept the federal funds rate at 3.50%-3.75% in its March 2026 Federal Open Market Committee meeting. With a potential rate cut indicated for 2026, the relatively lower rate environment is expected to encourage borrowing, support loan growth and drive earning asset expansion, thereby aiding NII growth. Additionally, improving fee-based business performance is likely to support non-interest income. Management expects NII to rise 10-12% and non-interest income to increase 6-8% in 2026 from the 2025 reported levels, supporting overall revenue growth in the near term.
The Zacks Consensus Estimate for CFG’s 2026 and 2027 revenues is pegged at $8.9 billion and $9.7 billion, which indicates year-over-year growth of 8.9% and 8.3%, respectively.
Revenue Estimates
Image Source: Zacks Investment Research
Strategic Initiative to Drive Efficiency: The company is undertaking its multi-year “Reimagine the Bank” initiative to streamline operations, enhance productivity and support long-term growth. The program focuses on operational redesign, technology modernization, risk optimization and business simplification, with increased use of automation and artificial intelligence (AI) capabilities.
The initiative is expected to lower costs, improve efficiency and enhance customer experience. Management projects a pre-tax benefit of nearly $450 million by 2028, primarily driven by expense savings. The program is also expected to become meaningfully accretive, supporting operating leverage and enhancing profitability, with more than 2% uplift in return on tangible common equity (ROTCE) by 2028.
Expected Pre-Tax Benefit
Image Source: Citizens Financial Group, Inc.
Loan & Deposit Growth Strength: The company maintains a healthy loan and deposit base, reflecting steady balance sheet growth. Over the last five years (2020-2025), loans and leases and deposits recorded a CAGR of 3.1% and 4.5%, respectively. CFG has been enhancing its deposit franchise by strengthening its deposit-gathering capabilities, supported by acquisitions such as HSBC branches and Investors Bancorp in 2021, which added low-cost deposits and expanded its branch network.
Management’s focus on relationship-based lending and attractive risk-adjusted returns is expected to support loan pipelines. Additionally, the sale of $1.9 billion of non-core education loans in the first quarter of 2025 is likely to reduce wholesale funding costs and support organic loan growth in its core portfolio.
Decent Liquidity Supports Capital Distribution: CFG maintains a decent liquidity position. As of Dec. 31, 2025, the company had $13.7 billion in available liquidity against $11.2 billion in long-term debt and $58 million in short-term debt.
Given this strength, Citizens Financial continues to return capital through share repurchases. In June 2025, the board approved an increase in its common share repurchase program to $1.5 billion. As of Dec. 31, 2025, $1.3 billion remained available under the program.
Apart from repurchases, the company has been consistently paying dividends. In October 2025, Citizens Financial raised its dividend by 9.5% to 46 cents per share. It has increased its dividend three times over the past five years while maintaining a payout ratio of 48%. Further, its dividend yield of 3.20% compares favorably with the industry’s 2.78%. Notably, the dividend yields of CFG’s peers, Bank OZK and Webster Financial, are 4.11% and 2.36%, respectively.
Dividend Yield
Image Source: Zacks Investment Research
Few Concerns for Citizens Financial
Elevated Expense Base: The company continues to face expense pressure, with non-interest expenses witnessing a CAGR of 5.9% over the last five years (2020-2025). While management is taking steps to improve efficiency and drive operating leverage, costs are expected to remain elevated in the near term.
The opening of private banking offices, national franchise expansion and ongoing investments in technology are likely to keep the expense base high, potentially limiting margin expansion in the near term. Management expects adjusted non-interest expenses to grow 4-5% in 2026 from the 2025 reported level.
Expense Trend
Image Source: Zacks Investment Research
Loan Concentration Risk: Citizens Financial’s loan portfolio remains heavily concentrated toward commercial loans, which accounted for 51.7% of total loans and leases as of Dec. 31, 2025.
Given the uncertain macroeconomic environment, this concentration may expose the company to higher credit risks. In the event of an economic downturn, asset quality could deteriorate and the lack of diversification may adversely impact its financial performance.
How to Approach CFG Stock Now?
In terms of valuation, CFG stock appears expensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings P/E ratio of 10.7X, higher than the industry’s 9.1X. Meanwhile, Bank OZK holds a P/E ratio of 7.2X, while Webster Financial’s P/E ratio stands at 9.9X.
Price-to-Earnings F12 M
Image Source: Zacks Investment Research
While the premium valuation, elevated expense base and loan concentration risk may raise some near-term concerns, these risks appear manageable given CFG’s decent liquidity position, expanding wealth-management franchise and ongoing efficiency initiatives under its “Reimagine the Bank” program.
Moreover, the Zacks Consensus Estimate for earnings per share has been revised upward to $5.08 for 2026 and $6.20 for 2027 over the past 60 days. This reflects analysts' optimism regarding the company’s earnings growth trajectory.
Estimates Revision Trend
Image Source: Zacks Investment Research
Overall, Citizens Financial stands out as a compelling choice for investors seeking exposure to a well-managed regional bank with expanding wealth-management capabilities, improving profitability trends and consistent capital-return initiatives. Hence, investors can consider investing in this Zacks Rank #2 (Buy) stock now to generate healthy long-term returns.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.