Citigroup Poised for Earnings Growth Amid Market Challenges
Citigroup Inc. (C), with a market capitalization of $134.3 billion, stands as one of the world’s leading financial institutions. Headquartered in New York, the company specializes in asset management, lending, and capital market services, catering to a diverse clientele that includes corporations, governments, and individuals. Investors are eagerly awaiting the company’s Q4 earnings report, set to be released on Wednesday, January 15, before market trading begins.
Strong Earnings Forecast for Q4
Analysts predict Citigroup will announce an adjusted profit of $1.23 per share, marking a significant 46.4% increase from the $0.84 per share reported in the same quarter last year. The company has demonstrated a solid track record in earnings surprises, consistently exceeding analysts’ expectations over the past four quarters. In its last quarterly report, Citigroup posted an adjusted EPS of $1.51, which surpassed predictions by 12.7% despite a slight decline.
Future Earnings Projections
Looking ahead, analysts forecast Citigroup’s adjusted EPS for fiscal year 2024 to be $5.88, reflecting a 4.3% rise from $5.64 in fiscal year 2023. Projections for fiscal year 2025 are even more optimistic, with expected earnings surging 22.6% to $7.21 per share.
Stock Performance Overview
In the past year, Citigroup’s stock has seen impressive growth, climbing 36.8%. This outpaces the Financial Select Sector SPDR Fund (XLF), which increased by 28.4%, and the S&P 500 Index ($SPX), which gained 23.8% during the same period.
Mixed Reactions to Recent Earnings Report
Despite delivering better-than-expected earnings for Q3 on October 15, Citigroup’s stock dropped over 5.1% in the trading session that followed. The company reported a slight revenue increase to $20.3 billion, which exceeded Wall Street expectations by 2.1%. Notably, growth was robust in Citigroup’s investment banking division, where revenues surged by 31.4% to $934 million. Additionally, securities services revenues grew by almost 24% year-over-year to $1.4 billion, while operating expenses decreased by 1.9% to $13.3 billion.
However, an increase in provisions for credit losses and benefits by 45.4% compared to the previous year to $2.7 billion put pressure on Citigroup’s profitability. This led to an 8.7% drop in net income, falling to $3.2 billion.
Analysts’ Outlook on Citigroup Stock
The overall sentiment among analysts regarding Citigroup stock is moderately bullish, reflected in a “Moderate Buy” rating. Out of 19 analysts covering the company, 10 have rated it a “Strong Buy,” two a “Moderate Buy,” and seven a “Hold.” The average price target is set at $79.45, indicating a 12.9% potential upside from the current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
