Attractive Price-to-Earnings Ratio
Low Price-to-Book Ratio
Strong Profit Margins
Good Return on Equity
Excellent Liquidity Ratios
Low Debt Levels
Strong Financial Performance
Positive Credit Trends
Strong Capital Position
Growth Initiatives in Private Banking
Optimistic NII and Fee Growth Outlook
Moderate Price-to-Sales Ratio
Operating Profit Margin
Interest Coverage Concern
Subdued Loan Demand
Uncertain Loan Growth
Citizens Financial Group demonstrates strong business quality with solid financial performance and effective risk management. However, subdued loan demand poses a challenge. Future prospects appear promising with the growth of the private bank and expectations for NII and fees, though loan growth remains uncertain in the near term.
Analysis Date: January 17, 2025
Last Updated: April 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$131.80
Current Market Price: $33.98
IV/P Ratio: 3.88x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
74.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CFG
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (10.01)
P/B ratio ≤ 1.5 (0.62)
Current ratio ≥ 2.0 (16.92x)
Long-term debt < Net current assets (0.33x)
Margin of safety (74.0%)
CFG meets all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
CFG displays solid net profit margin at 17.07%, indicating effective cost management and good profitability from its revenues.
The return on equity (ROE) of 6.23% reflects a decent ability to generate profit from shareholders' equity.
An operating profit margin of 21.20% is solid, but there is room for improvement in operational efficiency.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
6.23%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.18%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
100.00%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
17.07%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
CFG has a current ratio of 16.92 and a quick ratio of 16.92, indicating exceptional liquidity and the ability to cover short-term obligations easily.
The debt-to-equity ratio of 0.51 and debt-to-assets ratio of 0.06 demonstrate strong balance sheet management with low dependence on debt.
An interest coverage ratio of 0.41 suggests that CFG may face challenges in covering its interest expenses, indicating potential risk if earnings fluctuate.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.51x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
16.92x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The company reported strong sequential revenue growth led by net interest margin (NIM) expansion and capital markets fees. The net interest income (NII) grew by 3% sequentially, demonstrating strong financial health.
Credit trends are favorable, with non-performing assets (NPAs) down sequentially and criticized assets trending down. This indicates effective risk management and a strong credit portfolio.
The company's CET1 ratio strengthened to 10.8%, indicating a robust capital position that supports growth and stability.
There is subdued loan demand which could limit growth potential. The company has managed to offset this but it remains a challenge.
The private bank initiative is ramping up successfully, with a target to reach $12 billion in deposits and $11 billion in assets under management (AUM) by 2025, which is expected to be accretive to the bottom line.
The company expects solid growth in NII driven by further NIM expansion and a resumption of modest net loan growth, alongside fee growth of 8% to 10%.
While there is a projection for mid-single-digit loan growth, actual loan growth may remain subdued in the first half of 2025 due to market dynamics and the ongoing run-off of non-core loans.