Goldman says it’s finally time to buy this major bank turnaround story

Goldman Sachs has a buy rating on Citigroup for the first time since 2022, as the investment bank implements a turnaround strategy that should boost shareholder returns. Goldman has raised its stock price target for Citi to $68, implying nearly 18% upside from Wednesday’s close price of $57.76. “Citi can grow revenue and deliver on expense reductions simultaneously, and there is significant capacity for C to either buy back stock or expand its balance sheet,” Goldman’s team of analysts led by Richard Ramsden told clients in a note Thursday. C 1Y mountain Citigroup shares over the past year. Goldman sees a realistic path for Citigroup to deliver a return on common shareholder equity of 9.5% in 2026, as the bank aims to slash its costs by up to $2.5 billion by reducing head count and exiting from its remaining noncore international consumer franchise, among other measures. Goldman expects Citigroup’s revenue to grow at an accelerated compound annual rate of 4% to reach $85.7 billion by 2026. Citigroup is also expected to increase share buybacks by $1 billion in 2024 and $4 billion in 2025. The bank may have capacity for even more buybacks if Basel 3 rules are changed, it said. — CNBC’s Michael Bloom contributed to this report.