Citizens Financial Group (NYSE:CFG) shares rose more than 1% pre-market today after Raymond James analysts upgraded the company to Strong Buy from Market Perform, raising the price target to $55. The upgrade was based on improving conditions across key areas of the bank’s operations, signaling strong potential for profitability and growth.

The pressures from Citizens’ received-fixed swaps, which have weighed on its net interest margin (NIM) and net interest income (NII), are expected to diminish, providing a boost to its financial performance in the coming quarters. Additionally, capital markets fees are projected to rise as a more favorable environment for mergers and acquisitions (M&A) and capital raising emerged, potentially outperforming current expectations.

The bank’s private banking segment is anticipated to see accelerating profitability, reinforcing its growth trajectory. Meanwhile, credit concerns appeared manageable, with metrics likely to improve amid contracting interest rates and a shrinking contribution from its run-off portfolio.

With these tailwinds, Citizens Financial is well-positioned for enhanced profitability and earnings per share (EPS) growth.