Citi Research upgraded EFG International to a "buy" from "neutral," arguing that the Swiss private bank's stock weakness this year has created a more compelling entry point for investors. The research house increased its target price to SFr18.80 from SFr18.
EFG's shares closed at SFr16.80 on July 13, up 2.5% for the day, leaving the group with a market capitalisation of SFr5.16 billion. Citi's new target equates to an expected total return of 16.6% - made up of a 12.2% share price appreciation and a 4.5% dividend yield based on the firm's estimates.
Analysts at Citi note that the stock has fallen by more than 13% year to date, which contributed to a de-rating of over 15% to about 10.5 times fiscal 2028 estimated price-to-earnings. That multiple places EFG materially behind Swiss peers Julius Baer and Vontobel, both of which have risen between 15% and 20% year to date, reflecting roughly a 10% re-rating for those names and broader strength among European asset management and wealth peers.
In Citi's view, some portion of the de-rating is understandable given historical valuation dynamics; EFG has previously traded at a roughly 3.5 times premium to its closest peer, Julius Baer. But with headline multiples now roughly aligned between the two firms, EFG still carries about a 0.5 times premium on an ex-surplus capital basis, which Citi characterises as a somewhat harsh discount in light of EFG's operating performance.
Key operating metrics underpinning Citi's stance include net new asset growth above 6% at EFG compared with Julius Baer's net new money of around 2%. Using the SFr18.80 target, Citi implies the shares should trade near 12 times fiscal 2028 estimated earnings - modestly above the 11 times long-term average, or roughly 11 times when excluding surplus capital.
On the valuation spread, Citi states that on an ex-surplus capital basis EFG now represents a 0.5 to 1 times premium to Julius Baer, a meaningful change from a historical discount of roughly 2.5 times.
Citi's forecasts for EFG include fiscal 2028 adjusted earnings of SFr516 million and a progression in net income from SFr252.5 million in 2025 to SFr515.9 million by 2028. Adjusted earnings per share are modelled at SFr1.58 in 2028, up from SFr0.80 in 2025. Citi also projects the bank's dividend per share increasing to SFr1.00 in 2028 from SFr0.65 in 2025, which the bank translates to a net dividend yield of 6% under its assumptions.
For the first half of 2026, Citi expects pre-tax profit to exceed SFr240 million, excluding an exceptional gain of SFr55 million that was recorded in the first half of 2025. On that basis, Citi models a year-on-year uplift of about 12% for H1 pre-tax profit. EFG is due to publish its half-year results on July 23.
Assets under management for the period are forecast by Citi at SFr199 billion, which the firm notes is roughly 3% ahead of Visible Alpha consensus.
In addition to the EFG upgrade, Citi raised its target price for Julius Baer to SFr81 and kept a SFr75.5 target on Vontobel.
While upgrading EFG, Citi also flagged a series of risks for investors to consider: sizeable contingent legal liabilities at EFG; revenue sensitivity to market and currency fluctuations; and the possibility that sustained outperformance and continued delivery by Julius Baer could prompt further investor rotation away from EFG shares.
Summary
Citi's move to a buy rating on EFG International reflects a view that the bank's significant year-to-date share decline and de-rating have created an attractive valuation entry point. The broker increased its target to SFr18.80 and laid out multi-year earnings, EPS and dividend forecasts to 2028, while emphasising legal and market risks that could affect the stock.
Key points
- Citi upgraded EFG International to buy and raised its target price to SFr18.80, implying a 16.6% total return.
- Citi projects fiscal 2028 adjusted earnings of SFr516 million, with net income rising to SFr515.9 million by 2028 and adjusted EPS of SFr1.58.
- The research house highlights EFG's net new asset growth above 6% as a positive operating trend versus Julius Baer's roughly 2% net new money.
Risks and uncertainties
- Sizable contingent legal liabilities at EFG could weigh on earnings and capital.
- EFG's revenues are sensitive to market performance and currency movements, creating potential volatility for results.
- Further outperformance by peers such as Julius Baer could accelerate investor rotation away from EFG shares.
This coverage note provides a valuation and earnings roadmap grounded in Citi's forecasts, while explicitly calling out the principal downside risks that could alter the investment thesis.