JP Morgan Raises Target Price on Citi (C), Keeps Overweight Call

Core Viewpoint - Citigroup Inc. is recognized as one of the 10 Best Bank Stocks to Buy in 2026, with JPMorgan raising its target price on Citi by 3.1% to $134, maintaining an Overweight rating on the stock [1][4]. Financial Performance - Citigroup reported a 13.5% year-over-year decline in attributable net income to $2.5 billion, down from $2.9 billion. However, after excluding a $1.1 billion net income hit from the sale of its Russia unit, adjusted attributable net income grew 25.8% year-over-year to $3.6 billion [3]. - Earnings per diluted share increased by 29.1% year-over-year to $1.73, up from $1.34, contributing to a 6-basis-point improvement in adjusted return on average assets to 0.52% and a 125-basis-point improvement in adjusted return on average common equity to 6.55% [3]. Revenue Drivers - The earnings growth was primarily driven by a 14.1% year-over-year increase in net interest income (NII) to $15.7 billion, reflecting growth in the bank's loan book and a modest improvement in net interest margin (NIM) [5]. - Gross loans grew 8.3% year-over-year to $733.0 billion, with approximately 73% of this growth attributed to the commercial loan segment, which increased by $42.3 billion year-over-year to $343.7 billion [5]. Interest Margin Analysis - NIM expanded modestly by 7 basis points to 2.49%, as the decline in loan yields was offset by higher deposit costs. The average cost of interest-bearing deposits improved by 51 basis points year-over-year to 2.83%, while the average gross loan yield declined by 54 basis points year-over-year to 8.30% [6]. Market Outlook - JPMorgan expressed a favorable outlook on bank stocks for the current market cycle, citing good economic trends, steady fundamentals, sticky inflation, a favorable regulatory environment, and an uptick in bank consolidations as key factors [2].