UPDATE: Keefe, Bruyette & Woods Upgrades Citigroup As Path To Improved Returns Opens

In a report published Friday, Keefe, Bruyette & Woods analyst Brian Kleinhanzl upgraded the rating on Citigroup Inc (NYSE: C) from Market Perform to Outperform, and raised the price target from $54.00 to $61.00.

In the report, Keefe, Bruyette & Woods noted, "We are upgrading shares of Citigroup to Outperform from Market Perform. We believe C has a clearer path to improved returns and the company should no longer trade at a discount to tangible book value. Citi should benefit longer term from the Costco co-brand deal, and we believe that CCAR will be less meaningful for C no matter the result. We believe that C will be able to control expenses in the current regulatory environment, and lower legal and repositioning helped move our 2016 EPS estimates higher. Altogether, we like the direction C is heading with potential for Cards growth, reduced emerging market risk, and potential for capital return."

Citigroup closed on Thursday at $53.56.