Citigroup 's struggles could get worse from here, Morgan Stanley said Monday. Analyst Betsy Graseck downgraded Citigroup shares to underweight from equal weight. The analyst also has a price target of $60 per share on the bank, which is just 5.7% above where Citigroup closed on Friday. The analyst cited two reasons for her downgrade: a "lack of near-term catalysts and the negative impact of de-globalization." Graseck noted that Citigroup CEO Jane Fraser is taking "strong, proactive strategic action to boost returns closer to peers," but added that these moves will "take time to play out," leaving the the company with few positive catalysts for the near term. She also said that the "shift toward de-globalization is also negative for Citi," given the bank's global presence. "Not only does Citi need to execute on multiple fronts (wealth management, treasury and trade services, US personal banking), but it also needs to do this in an environment with higher tail risks both domestically and internationally," Graseck said. Citigroup shares have struggled this year, falling 6% through Friday's close. The stock is also lagging peers such as Bank of America — which Morgan Stanley upgraded Monday — and Wells Fargo. Shares of Wells Fargo are up 9.6% year to date, and Bank of America is down just 1.7% for 2022.
Citigroup's struggles could get worse from here, Morgan Stanley said Monday.