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Citigroup<\/a> Inc. hosted its annual investor day this week, with a big push<\/a> from CEO Jane Fraser to redefine how it\u2019s biggest segment, services, is valued. Apparently, it worked, as Morgan Stanley<\/a> analysts today pinned the value of Citi\u2019s services segment, which includes many of the payment rails that connect global finance, to about $56 billion ($30 per share)\u2014nearly half the bank\u2019s entire value. Citi\u2019s market cap is currently $115.8 billion.<\/p>\n The segment, which includes what Citi calls Treasury and Trade Solutions such as liquidity management, and Securities Services, like custody and fund services, transacts about $5 trillion a day for clients including Microsoft<\/a>, Walmart<\/a>, and Stripe<\/a> according to the Morgan Stanley report.<\/p>\n \u201cThe bank views Services as its crown jewel located at the heart of Citi\u2019s global network,\u201d wrote report authors, and equity analysts Betsy L. Graseck and Ryan Kenny.<\/p>\n The authors found that Citi\u2019s Services segment\u2019s Return on Average Tangible Common Shareholders\u2019 Equity (ROTCE)\u2014a metric that divides annualized net earnings by average monthly tangible common shareholders\u2019 equity\u2014has between between 21 percent and 23 percent over the last 3 quarters, the highest of any Citi segment.<\/p>\n Citi believes that continued growth in the volume of the segment can offset headwinds from lower rates. \u201cSpecifically,\u201d the report\u2019s authors note, \u201cCiti highlighted expectations for continued strength in cross-border transactions, US dollar clearing volumes, commercial card volumes, and trade loans.\u201d<\/p>\n In spite of the higher-than-expected returns Citi maintained its ROTCE target of between about 11 percent and 12 percent until 2026, with revenue increasing 4 percent to 5 percent compounded annually.<\/p>\n Earlier this week, Citi hosted a full day of presentations just on services, reintroducing Wall Street to what the Wall Street Journal<\/em> described<\/a> as a \u201ccollection of functions most big companies couldn\u2019t do without,\u201d and which could increase the value of Citi\u2019s stock if accounted for differently. While Citi\u2019s stock has increased 14 percent this year to $60.62, analysts at Oppenheimer and Wells Fargo<\/a> have the stock marked to buy with a target price of $86.00 and $85.00 respectively.<\/p>\n Last week Citi\u2019s acting CIO told<\/a> Fortune<\/em> he expects a calmer than expected economy will help reduce the impact of rapid artificial intelligence adoption on the jobs market.<\/p>\n<\/div>\n\nSubscribe to the Fortune Next to Lead newsletter to get weekly strategies on how to make it to the corner office. Sign up for free<\/a> before it launches on June 24, 2024.<\/div>\n<\/div>\n