Citizens Financial Group's (CFG) plan to overhaul operations in a multiyear effort called "Reimagine the Bank" is expected to boost profitability by 2028, Morgan Stanley said Wednesday in a report.

The initiative, which includes simplifying processes and expanding automation, may generate $450 million in annual pretax benefits by the end of 2028, Morgan Stanley said. Because those savings and added revenue flow straight into earnings without requiring more capital, the program may add 2 percentage points to Citizens' return on tangible common equity before any reinvestment, the report said.

Morgan Stanley also expects stronger fee income in 2026, helped by a healthy deal pipeline. The firm projects fee growth of more than 9% from a year earlier, slightly above Citizens' own guidance.

Morgan Stanley raised its price target on Citizens stock to $73 from $71 and reiterated its overweight rating.

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