10:40 AM EDT, 09/29/2025 (MT Newswires) -- Citizens Financial Group's ( CFG ) valuation gap versus peers is expected to narrow as investors become more confident in the sustainability of the company's higher return on tangible common equity or ROTCE, Morgan Stanley said in a note Monday.

The investment bank said it sees Citizens Financial's ROTCE improving to 15% in 2027 from 11% in Q2 of 2025, bridging the the gap with its peers and getting closer to the company's target of 16% to 18%.

Morgan Stanley said the company's private bank buildout, improving credit and the expected lower capital requirements after the Federal Reserve's stress test in 2026 are positive catalysts for Citizens Financial.

The firm added that it expects rate cuts in the next several quarters to be a tailwind to credit quality across the group.

Morgan Stanley upgraded the company's rating to overweight from equal-weight and raised its price target to $71 from $53.

Price: 53.23, Change: -0.16, Percent Change: -0.29