Wells Fargo bank analyst Mike Mayo highlighted Citigroup stock as his favorite bank name on Tuesday while speaking on CNBC’s “Squawk on the Street.” Shares of Citigroup could double over the next two-and-a-half years “simply by going back to tangible book value,” Mayo said. Citigroup sold for 73% of tangible book at the end of June, up from 60% at the end of last December, according to FactSet data. Under the leadership of CEO Jane Fraser, “if they meet their targets this year, they should have among the best relationship between revenue growth and expense growth in the industry, and we expect earnings to double for the three years ending 2026. So we’ll see if they execute,” Mayo added. C YTD mountain Citigroup in 2024. The analyst, who began his career in 1988 and worked at the Federal Reserve, UBS, Lehman Brothers, Credit Suisse, Prudential, Deutsche Bank and CLSA before landing at Wells Fargo in 2017, applauded U.S. banks for their resiliency. U.S. banks strengthened their operations during the Covid-19 pandemic to the point where they were able to weather 2023’s regional bank mini crisis relatively unscathed. The country’s biggest banks have all passed the Federal Reserve’s annual stress tests, designed to measure whether banks could withstand a severe economic recession. “Even after running this model, banks still have plenty of excess capital to support the economy,” Mayo noted. “Recession or no recession; higher rates or lower rates … whatever hits you, I think banks are able to weather it quite well now.”
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