Trump tariffs and the related fears of an economic slowdown ahead are broadly expected to serve as headwinds for the US bank stocks in 2025.
Still, one of them, Citigroup Inc (NYSE: C), is worth buying on the recent weakness, according to Wells Fargo analyst Mike Mayo.
Mayo expects Citi stock to benefit amidst the new tariff environment.
A close to 20% hit to its share price since mid-February has created an opportunity for long-term investors to buy a quality name at a deep discount, he argued in a research note on Monday.
Citi has a history of benefitting from tariffs
Despite the recent pullback in bank stocks, Mike Mayo continues to rate Citigroup at “overweight” and sees an upside in its shares to $110 indicating a potential upside of about 60% from here.
In his report, he recommended capitalizing on the recent weakness in Citi stock as it’s currently trading at a deep discount.
The analyst took heart in the fact that Citi benefitted from higher tariffs during Trump’s previous tenure as well since “it’s a global intermediary across regions,” adding it’s “important at a time when their buybacks could go further at ¾ of tangible book value.”
A healthy 3.2% dividend yield coupled with Citi shares makes them all the more exciting to own at current levels, according to the Wells Fargo analyst.
What else could help Citi stock in 2025?
Mayo remains uber bullish on Citigroup Inc. as he sees the financial services giant switching from “value destruction to value creation in 2026.”
While new levies under the Trump administration have been hurting bank stocks recently, the Wells Fargo analyst expects potential deregulation to meaningfully benefit Citi stock in 2025.
He’s convinced that Scott Bessent – the US Treasury Secretary will remove the red tap to put banks in charge of their own lending decisions.
Note that Citi shares are still up close to 25% versus their 52-week low despite the recent sell-off.
Citi topped estimates in its fiscal Q4
Mike Mayo remains constructive on Citi stock also because the NYSE-listed firm reported solid results for its fourth quarter in January.
Citigroup swung to a profit and topped estimates on both the top and the bottom lines in its fiscal Q4.
At the time, chief executive Jane Fraser told investors:
I want this company set up for long-term success and to ensure that we have enough capacity to invest for that.
We intend to improve returns and deliver Citi’s full potential for our shareholders.
In January, Citigroup which recently avoided one of the largest banking blunders ever also announced a massive $20 billion stock repurchase program.
About $1.5 billion of that will be executed in Q1, according to its chief of finance, Mark Mason.
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