Shares of Citizens Financial Group Inc (NYSE:CFG), a retail bank holding company, worth $3.2 billion were sold in a larger than expected public offering by the Royal Bank of Scotland (RBS) but interestingly, the market was able to absorb all that supply very comfortably and the stock even managed to close about 2% off from the day’s low. The stock closed at $24.12 for the day even as 135 million shares were sold at $23.75, about 24.7% stake in CFG. Now the holding of RBS in CFG has come down to 45.6%. The move was a strategic step on the part of RBS, reducing its holding after an initial public offering last year. It has plans to sell more as RBS wants to exit the bank completely by the end of 2016.
With nine “hold” and eight “buy” ratings, the street perception regarding the stock of Citizens Financial Group Inc (NYSE:CFG) can be generally stated as stable. Deutsche Bank has a target of $27 for the stock, same as the Credit Suisse Group AG but the ratings differ as Deutsche Bank sticks with its “buy” rating while the latter has a “neutral” rating. The general targets from the various houses come in the band of $26-$28.
(Chart – Amigobulls )
The technical data for the stock is not that large as the listing took place just about 6 months back. Anyway, the entire price action is nicely contained in a perfect channel and the current price is almost testing the lower boundary of the channel. With the heavy selling yesterday failing to break the channel downwards, the probability of a bounce looks higher. The immediate resistance is close at $24.50 levels, but above that the stock can easily reach the $26 levels or even higher. Investors may buy the stock at the current levels with a stop loss below $23.