Jim Cramer’s Bold Predictions About These 10 Financial Stocks

8. Citizens Financial Group, Inc. (NYSE:CFG)

Number of Hedge Fund Holders In Q3 2024: 46

Date of Cramer’s Comments: 10-07-24 to 10-10-24

Performance Since Then: 5.95%

Citizens Financial Group, Inc. (NYSE:CFG) is a regional bank with a presence in the consumer, private, and commercial banking markets. As is with most banks, the current interest rate regime has seen Citizens Financial Group, Inc. (NYSE:CFG) struggle to balance its interest income with interest expenses. While higher rates typically allow banks to charge more money from borrowers, they are accompanied by lower loan demand and higher payouts to depositors. Subsequently, for the first nine months of 2024, Citizens Financial Group, Inc. (NYSE:CFG)’s net interest income dropped by 11.2% to $4.2 billion. Since Cramer’s remarks in October, the stock has seen a lot of magic. It soared by a whopping 14.4% in November after the election as investors bet on lower regulations but closed 4.7% lower on the day of the Fed’s remarks due to higher costs stemming from higher rates. Here’s what Cramer said:

“It’s a Northeast bank, it’s called Citizens Financial Group. I haven’t focused on it since it was spun off by the Royal Bank of Scotland a decade ago. When you take a closer look at Citizens, it’s got some of the best capital ratios of large regional banks. That matters for a couple of reasons. First, it offers safety. This is how you know Citizens won’t be the next First Republic if we have another banking blow-up. But more importantly, in calmer times, it gives them [the] flexibility to do other shareholder-friendly things, dividends [and] buybacks. In fact, in late July, after hearing all the regional banks report second-quarter earnings, analysts at Deutsche Bank called Citizens Financial their top pick in the sector, citing strong earnings growth potential as net interest margins normalize, growth initiatives pay off like the private bank build-out and their expansion in New York City and mortgage demand bounced back thanks to lower rates. Deutsche Bank analysts also know that Citizen has been held back in recent quarters by some significant one-off items. But management is signaling that there shouldn’t be much more of an impact from that kind of thing going forward. That all sounds real good to me. So count me in as a believer in Citizens Financial.”