Nomura Securities Cuts Price Target on Citigroup (C) to $57 Following 2Q EPS Beat

Nomura Securities maintained a Buy rating on Citigroup (NYSE: C), and cut the price target to $57.00 (from $62.00), following the company's 2Q earnings report. EPS was reported at $1.24, ahead of the Street's $1.10 estimate. However, an updated commentary suggests that consensus forecasts are too high for 2H16 and 2017, placing pressure on shares.

Analyst Steven Chubak commented, "Citi reported 2Q adjusted EPS of $1.24, exceeding both our $1.11 and cons. of $1.10. Versus our forecast, the beat was largely driven by lower credit costs and (to a lesser extent) better revenues in Citicorp, notably FICC / DCM; this more than offset higher Holdings expense. Despite the strong beat, shares underperformed peers modestly (down -30bps vs. -10bps for Universals) as updated outlook commentary suggests cons. forecasts are too high for 2H16 / 2017. We cut our out-year estimates to reflect updated guidance and lower rate expectations (no hikes through 2017); TP moves to $57 from $62 on EPS cuts, as well as changes to our valuation framework to reflect the impact of G-SIB surcharge inclusion in CCAR. Despite negative revision risk, with shares trading at ~70% TBV, risk / reward still appears compelling, in our view."

For an analyst ratings summary and ratings history on Citi click here. For more ratings news on Citi click here.

Shares of Citi closed at $44.33 yesterday.

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