Morgan Stanley Analyst Is Upbeat on Citi (C) Stock Heading Into Earnings

Heading into Citi’s (C) first-quarter results, due to be unveiled on April 15, Morgan Stanley analyst Betsy Graseck is bullish on its shares. On the other hand, due to valuation concerns, she’s less upbeat on JPMorgan.

As far as the large banks’ overall outlook, the analyst predicts that they will be facing challenges related to the tariffs going forward.

Bullish on Citi, Not Excited About JPM

Citi’s shares are trading below their book value and their tangible book value, Graseck said. As a result, the bank can profitably buy back its own shares, propelling its return on equity towards its 10% goal.  Also helping with the latter goal will be Citi’s efforts to take market share in M&A and banking, along with its efforts to become more efficient, the analyst stated.

Meanwhile, JPM is “knocking it out of the park in so many ways,” but its valuation is significantly higher than that of Citi, Graseck noted.

The analyst has an Overweight rating on C and an Equal Weight rating on JPM.

Assessing the Banks’ Outlooks

The large banks will report “solid” Q1 results, driven by the strong trading environment and “in-line” banking numbers, Graseck said.

But fewer companies will qualify for their loans going forward due to the tariffs that the U.S. is implementing. And in light of the tariffs, many firms will be uncertain about the extent to which they will invest in themselves going forward, she explained.

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Disclosure: None. This article is originally published at Insider Monkey.