Citigroup (C) could surpass market expectations on earnings in the coming year or two after making progress in its cost-cutting program, Oppenheimer said in a note Monday.
“While Citi has some headwinds to earnings we think that expectations have been beaten down so low, and progress on expenses sufficient that we think the probabilities are very high that they will beat street expectations in the coming year or two,” Oppenheimer analysts Chris Kotowski and Kevin Tripp said.
After a long period of guiding that the “cost curve” would “bend” between Q3 and Q4 of 2024, the management effectively said it had bent already and that costs would be sequentially lower from here for the next few quarters, the analysts said.
“There is significant upside to this level of earnings over the next 2-3 years,” they said.
Oppenheimer trimmed its price target to $87 from $88 while keeping its outperform rating.