Wedbush downgraded Citizens Financial Group, Inc. (NYSE:CFG) to Neutral from Outperform with a price target of $45, mostly based on their expectation for increasing credit costs in a recessionary environment.

The analysts believe we are in the early-to-middle innings of an economic downturn given the significant amount of liquidity being withdrawn from the banking system by the Fed and the resulting negative impact this could have on the economy, especially rising unemployment.

The company's loan loss reserve in the most recent quarter was 1.27%, which was below the regional peer median of 1.46%. Given what the analysts believe to be a relatively higher-risk loan portfolio due to the higher consumer exposure, the company may need to increase its reserves more than the average bank through an economic downturn, which could result in additional credit costs in the form of above-average reserve building.