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Citigroup (C): Will The Stock Rebound?

12:02 am ET, 09 Apr 2018

Citigroup's stock (NYSE: C) price saw a 7.34% decline this year.

Citi is a leading global bank with about 200 million customers and is present in more than 160 countries of the world. Its brand is outstanding, but many investors are wondering, what is the stock price forecast now? 

Since the company's price-to-book value is around 1, investors barely account for its intrinsic value in the stock price. The elevated CBOE Volatility Index further increases Citi’s profitability.

In fundamental terms, Citigroup has a healthy stock, as demonstrated by its balance sheet. Since the banking regulation is becoming a little less constraining these days and the interest rates are going up, banks are becoming increasingly more profitable.

Can this stock rise further? Per Finstead Research, Citigroup has an average price target of almost $84. It has a significant upside compared to the current price. 

Citigroup has the lowest valuation among its peers.

JPMorgan Chase (JPM): What Does The Future Look Like?

6:45 pm ET, 05 Apr 2018

 JPMorgan Chase’s (NASDAQ: JPM) stock price barely increased in today’s trading

Jamie Dimon, the company's CEO, praised President Trump because of his tax cuts and deregulation while criticizing his trade and immigration policies beacause they will likely hurt growth in the United States.

According to Dimon, it is possible for the bank to grow and penetrate into new markets by investing excess capital stemming from the new federal tax cuts and constructive regulatory environment since the 2016 presidential elections.

According to Dimon, JPMorgan can earn a 17% return on the tangible equity that exceeds the target before the enactment of corporate tax cuts. It is also above the company’s 2017 performance by almost 4%.

CEO Dimon pointed out to Wall Street's low-profit estimates and declared that he would concentrate on buybacks to return capital to JPM's shareholders. This is indeed good news for the shareholders.

Dimon holds an opinion that buying back a big block of share would enhance the earnings per share by 2%-3% in the upcoming 5 years, with the tangible book value remaining virtually constant. Currently, the company has 1.6 times tangible book ratio which is below Dimon's threshold.

Per Finstead Research, JP Morgan has the average price target of $119. The stock price has an upside of about 9%.

JPMorgan's valuation is considered to be not overly conservative or aggressive. Based on the forward P/E ratio, JPMorgan is ahead of CMSGS, and  BAC, but behind WFC.  

5 Key Things You Should Understand About The Banking Sector

4:44 pm ET, 22 Jan 2018

If you're pondering investments in the banking sector, there are some key themes for 2018 you should understand that may shape your thinking about investing in large banks such as JP Morgan Chase, Citi, Wells FargoBank of America, or even smaller, regional ones.

The growth of the banking sector has been decreasing over the last 12 months. High interest rates involved have made large corporations to opt for borrowing and debt issuance at the prime rate on credit facilities. 

Here are the five things to know about the banking sector in 2018.

1. Credit Card Lending: In terms of loan development, credit card lending remains a major focus with solid gains and high consumer confidence in employment. Over the years, consumer finance companies and banks have been leading in rewarding credit card programs that attract new customers. Loan growth for most banks remains between single-digit low and medium range in 2018. 

2. The Increase of Net Charge-offs: While credit card lending may affect future margins, the net charge-offs may rise gradually with the maturing of the credit cycle though it can still remain below the historical standards. 

3. Flattening of the Productivity Curve: This is due to the long maturities that have not complied with the short-term rate rise. There are still high expectations of Fed hikes in 2018 with higher productivity continuing to slow down. 

4. Expansion of Interest Margin: This will occur even if the flatter yield curve does not offer similar lending business benefit as the initial rate increases of Fed. 

5. Favorable Regulatory Environment: This is a result of the new stance on deregulation of the new administration despite the stalling of the wider legislative efforts. With this, the earnings from the financial sector will remain favorable in relation to the broader market.

Though there have been variations in the banking sector, the requirements for reduced capital could create room for more lending. This is expected to significantly benefit most financial institutions in 2018. 

Over the last year, JPM returned +36.25%. This return is higher than the Money Center Banks industry (22.22%), the Financial sector (11.89%), and S&P 500 (24.73%) returns.

Over the last year, Citi returned +39.58%.  See below.

Over the last year, BAC returned +40.59%.   Details below.

WFC returned only +17.54%.  While this return is higher than the Financial sector return (11.89%), it is lower than the Money Center Banks industry (22.22%) and S&P 500 (24.73%) returns.

Citigroup Inc. (C) Stock Guide

Updated at: 11:31 am ET, 13 Nov 2020

Before we start: if you're looking for C stock price, you can quickly find it out by visiting Finny and typing "C quote". If you're looking for a quick scoop on C stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "C". You'll get all this info in one place. Or you can just type "C news" to get the latest stock news.

Looking to buy or sell Citigroup Inc. (C)? Interested in getting the full scoop on C, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this C stock guide, we'll address key questions about C, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are C earnings?
2. When is C earnings date?
3. What is C dividend?
4. What is C dividend yield?
5. What is C stock forecast (i.e., prediction)?
6. C buy or sell? What is C Finny Score?
7. What are the reasons to buy C? Why should I buy C stock?
8. What are the reasons to sell C? Why should I sell C stock?
9. What are C key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are C earnings?

C trailing 12-month earnings per share (EPS) is $5.13.

2. When is C earnings date?

C earnings date is January 15, 2021.

3. What is C dividend?

C forward dividend is $2.04.

4. What is C dividend yield?

C forward dividend yield is 4.93%.

Analyst Predictions

5. What is C stock forecast (i.e., prediction)?

Based on C analyst price targets, C stock forecast is $62.16 (for a year from now). That means the average analyst price target for C stock is $62.16. The prediction is based on 29 analyst estimates.

The low price target for C is $43.60, while the high price target is $99.00.

C analyst rating is Buy.


6. C buy or sell? What is C Finny Score?

#{finnyScore:89}Our quantitative analysis shows 8 reasons to buy and 1 reason to sell C, resulting in Finny Score of 89.

7. What are the reasons to buy C? Why should I buy C stock?

Here are the reasons to buy C stock:

  • Citigroup is leveraged to the rise of Asia, Latin America, and other emerging markets, while its competitors will struggle with lackluster loan demand in the U.S. and Western Europe.
  • Citigroup is recapitalized and refocused under new management--the perfect conditions for a successful turnaround.
  • A shrinking balance sheet, falling expenses, and a lighter regulatory environment provide a perfect combination for capital return over the next five years.
  • Citigroup's long-term strategy to shrink its non-core assets and increase fee-based business mix would improve valuation over time. The rundown of Citi Holdings – its legacy problem assets portfolio – is largely complete. These runoffs ultimately reduce the company's risk profile and free up capital for investment in core businesses.
  • Citigroup’s operating expenses witnessed a negative CAGR of 9.2% over four years (2014-2017). Expenses decreased as the impact of higher volume-related expenses and ongoing investments were more than offset by efficiency savings and the wind- down of legacy assets. Therefore, continued downtrend in expenses will aid bottom-line expansion.
  • Citigroup has been emphasizing on growth in core businesses through expense management and streamlining operations internationally. Further, the company continues to optimize its branch network, with focus on core urban markets, improving digital channels and reducing branches. The company is also making investment in several areas to stoke growth.
  • Though revenues remained volatile over the past few years, it recorded 2% year-over-year improvement in 2017. We expect the bank to record significant growth in revenues in the near term, with continued economic recovery and focus on core operations with strategic actions. Notably, for 2018, management projects top-line growth at around 3%, with stronger growth in operating businesses being offset by the continued wind down of legacy assets.
  • Driven by a solid capital position, Citigroup remains committed towards enhancing its shareholders’ value with steady capital deployment activities. Notably, the company’s 2017 capital plan received the Federal Reserve’s approval, following which the company announced dividend hike to 32 cents per share in July 2017, double from the previous pay out. Further, the plan includes a share repurchase authorization worth $15.6 billion for the four quarters beginning third-quarter 2017, summing the capital deployment to $18.6 billion.
  • C profitability is improving. The YoY profit margin change was 36.20 percentage points. See C profitability chart.
  • C forward dividend yield is 4.93%, higher than the industry (1.04%) and sector (0.96%) forward dividend yields. See C forward dividend chart.
  • C forward P/E ratio is 7.33, which is low compared to its industry peers’ P/E ratios. See C forward P/E ratio chart.
  • C Price/Book ratio is 0.49, which is low compared to its industry peers’ P/B ratios. See C forward Price/Book ratio chart.
  • C Price/Sales ratio is 1.48, which is low compared to its industry peers’ P/S ratios. See C forward Price/Sales ratio chart.
  • C average analyst rating is Buy. See C analyst rating chart.
  • C average analyst price target ($62.16) is above its current price ($48.28). See C price target chart.
  • C cash to debt ratio is 1.86, higher than the average industry (0.16) and sector (0.18) cash to debt ratio. See C cash to debt chart.

8. What are the reasons to sell C? Why should I sell C stock?

Let's look at the reasons to sell C stock (i.e., the bear case):

  • Emerging-market exposure will pull Citigroup down just as the U.S. begins to recover.
  • The culture that led to Citigroup's bailout will not be easy to change. The company may be too big for anyone to manage successfully.
  • Returns on tangible equity continue to fall well below the bank's cost of capital.
  • Citigroup continues to encounter many investigations and lawsuits from investors and regulators. Though the company resolved certain litigations related to the sale of risky mortgage-backed securities and other issues, many of the cases are yet to be resolved. As Citigroup continues to work through its legacy legal issues, we believe the company will continue to witness increased legal expenses and litigation provisions, which will likely hurt its financials.
  • Although Citigroup's underlying franchises of the consumer businesses have remained strong, its net interest margin (NIM) has remained under pressure for the past several quarters. Though the company should benefit in a rising rate environment, the near- term outlook remains weak. Improvement in the core franchise is expected to be mitigated by the persistent decline in the company’s legacy holdings portfolio.
  • C quarterly revenue growth was -6.10%, lower than the industry and sector average revenue growth (0.08% and 1.02%, respectively). See C revenue growth chart.

Key Stats

9. What are C key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for C:

Metrics C
Price $58.35
Average Price Target / Upside $62.16 / 6.52%
Average Analyst Rating Buy
Forward Dividend Yield 3.70%
Industry Banks - Global
Sector Financial Services
Number of Employees 204,000
Market Cap $115.49B
Forward P/E Ratio 9.71
Price/Book Ratio 1.99
Revenue (TTM) $58.08B
YoY Quarterly Revenue Growth -6.10%
Profit Margin 20.74%

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