Citigroup (C) reported Q3 results that surpassed both consensus and high-end analyst estimates, driven by "strong core pre-provision earnings growth" across all segments, Oppenheimer said in a report Wednesday.

Core pre-provision earnings rose more than 20% year over year to $8.6 billion, beating expectations of $7.8 billion and underscoring the bank's "broad-based" operational momentum, the brokerage said.

Excluding a goodwill impairment related to Banamex, Citigroup reported earnings of $2.24 per share, topping both consensus estimates of $1.73 and a Wall Street-high forecast of $2.10. Reported EPS came in at $1.86. Total revenue climbed 8.7% to $22.1 billion, while expenses excluding the impairment increased just 2.5% to $13.6 billion.

Oppenheimer said Citigroup's goal of achieving a 10% to 11% return on tangible common equity by 2026 looks increasingly credible following the latest results.

The firm raised its 2026 earnings estimate for the bank and expects consensus forecasts to improve, though market expectations remain cautious. Despite a 42% year-to-date rally and a positive reaction to earnings, Citi's stock is still considered undervalued based on its low relative price-to-earnings multiple.

Oppenheimer has an outperform rating on Citigroup with a price target of $123.

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