Citigroup is a diversified financial services holding company with operations in North America, Latin America, Asia, Europe, the Middle East, and Africa. The company operates through three segments: Institutional Clients Group (ICG), Private Banking and Wealth Management (PBWM), and Legacy Franchises.
Citigroup had a net income margin of 5.88% and a return on equity of 6.49%. The company had revenue of $17.44 billion in the fourth quarter, compared to analysts' estimates of $18.71 billion.
The company earned $1.10 in EPS in the fourth quarter of 2022. Its revenue fell 3.1% from the same period in 2022. Equity analysts expect Citigroup to earn $5.97 in EPS for the current fiscal year.
Citigroup is in the midst of a restructuring effort aimed at transforming the bank into a leaner, more profitable company. For the past 20 years, Citigroup has struggled with high costs and a tarnished reputation after CEO Jane Fraser’s predecessors failed to meet their targets.
Citigroup stock currently has an advantage over most other bank stocks in terms of value. The stock's relatively poor performance since 2020, despite a rebound in revenue and earnings growth since then, has made Citigroup's stock much cheaper than its peers.
Like many other banks at the time, the 2008 subprime mortgage crisis prompted the bank to abandon its dividend for several years. However, after resuming quarterly payments in 2011, the company has continued to pay them.
One reason that strengthens the bullish case for Citigroup stock is the prospect of interest rate cuts in 2024, which would benefit the entire banking industry more than recent high rates have hurt; lower borrowing costs could revive appetite for borrowing. Citigroup still has a long way to go to improve its profitability metrics as it streamlines operations.
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