Citi - One Foot in Front of the Other

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Citi - One Foot in Front of the Other

Truist Securities

Equity Research Report July 1, 2026

FINANCIALS: Universal Banks Citigroup Inc. (C)

Citi - One Foot in Front of the Other John McDonald

212-303-4179

John.McDonald@truist.com

We review the Citi thesis and set-up for the shares ahead of 2Q26 results. The biggest

investor discussion point in our catch-up conversations has been around valuation after

Peter Nicolo three years of outperformance, which now has Citi trading at a P/E premium to peers 212-303-4141

Peter.Nicolo@truist.com (11.6x vs. 11.0x) and 1.4x P/TBV against a near-term outlook for 11-13% ROTCE. Investors

continue to debate the burden of proof on Citi, which is expected to drive multiple years

of ROTCE expansion, efficiency improvement, and capital optimization, as well as whether John Manahan higher EPS growth expectations (and self-help drivers) are sufficient to justify a P/E premium 212-303-4158

John.Manahan@truist.com and some "advance credit" on P/TBV.

Highly Confident in ROTCE Commitment: On the recent conference circuit, CFO Gonzalo

Stock Rating BUY Luchetti expressed a high degree of confidence in delivering its 10-11% ROTCE target for this year, and the ~60% efficiency ratio commitment inside of that, on the way to higher Unchanged

returns over time. As Citi outlined at its May investor day (our recap here), ROTCE should

Price Target $158.00 trend up to a range of 11-13% over the near-term (i.e. 2027/2028), towards the high end of

Unchanged that range by 2028, and then 14-15% over the "medium term" (i.e. 2029-2031), driven at a

high-level by a) client momentum, b) structural efficiency gains, and c) capital productivity

via DTA utilization. Citi assumes that CET-1 trends higher to a target of 13.1% by 2028 (vs.