Thursday, October 22, 2015
CIT Group Rises 15.7% Today as Thain Announces Retirement
CIT Group is up 15.7% today to $46.14 as big news comes out announcing John Thain's retirement. This announcement surprised Wall Street after his short 5 year term at the lending company. Over the past five years, Thain recovered the company from Bankruptcy after 2008, cut costs, and improved returns. He also oversaw the recent $3.4B acquisition of the California bank OneWest. Thain will remain the chairman of CIT. Ellen Alemany will now lead the bank beginning in March and will be one of the few women leading a large bank. CIT also announced that they have taken a few steps to transition to a commercial bank model. They are planning on selling CIT Canada and CIT China. CIT Group is also exploring "strategic alternatives" for its $10B commercial aircraft business. The recommendation is still a BUY with a price target of $54.75. I will be revisiting the investment thesis to update it. I still view CIT Group as a sound company that has been cutting costs while transitioning to more profitable ventures. CIT Group is releasing earnings on November 3rd.