J.P. Morgan analyst Vivek Juneja on Thursday lowered his rating on Citizens Financial Group Inc.
CFG,
to neutral from overweight after the Fed’s annual bank stress test results. He kept the price target for the stock at $27 a share. Relative to its banking peers, Citizens will see its capital requirement increase, “which will further pressure profitability” at the bank, Juneja said. Citizens has a lower cushion relative to peers above minimum tier-one capital requirements based its capital levels on March 31 and has continued to buy back stock in the second quarter. “Citizens is being pressured by high losses on its commercial real estate (CRE) loans due to high level of maturities of office CRE loans in 2023 and 2024,” Juneja said. Citizens Financial Group stock is down 1.7% in premarket trades on Thursday.
