Citi downgrades Virgin Money after outperformance

Citi downgraded its recommendation on shares of challenger bank Virgin Money on Friday to ‘neutral’ from ‘buy’, pointing to the stock’s recent outperformance.

Citi noted Virgin shares are up more than 50% in the past month, well above larger domestic peers and the European bank sector, both of which are up around 30%.

After full-year results earlier in the week, Citi upped its FY21 earnings per share by 9% but left estimates for FY22 unchanged.

Citi said it remains constructive on the company’s self-help potential but is downgrading the stock given its relatively high mid-teens price-to-earnings ratio on FY21 earnings per share.