On Nov 18, 2014, we issued an updated research report on CIT Group Inc. (CIT). We expect the company’s restructuring initiatives and a continued rise in earning assets will drive growth going forward.
Owing to changes in the operating environment, CIT Group has been restructuring its business operations. Apart from re-organizing its segments, the company is making efforts toward lowering the Non-Strategic Portfolios.
Notably, CIT Group has exited all the less profitable countries in Asia, and a number of countries in Latin America and Europe. The company also has plans to exit from the remaining countries in Europe and Latin America. These initiatives, upon completion, are expected to reduce roughly $60 million of operating expenses on an annual basis.
CIT Group has come a long way after emerging from bankruptcy in 2009. In Jul 2014, the company announced the OneWest acquisition deal worth $3.4 billion. Further, in August, the company acquired Capital Direct Group. We believe CIT Group will continue expanding through acquisitions, driven by its strong liquidity position.
On the flip side, sluggish growth in the industries where CIT Group provides finance, along with stringent regulations, are expected to dent the company’s financial performance in the upcoming quarters.
Additionally, analysts have been showing mixed sentiments for CIT Group. The Zacks Consensus Estimate grew nearly 2.1% to $3.39 per share for 2014, while for 2015 it remained unchanged at $3.34 per share, over the past 30 days.
CIT Group currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked finance stocks include Consumer Portfolio Services, Inc. (CPSS), Synchrony Financial (SYF) and General Finance Corporation (GFN). All these stocks sport a Zacks Rank #2 (Buy).
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