Citigroup (C) AI Stock Analysis

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Citigroup

(NYSE:C)

Rating:74Outperform

Price Target:

$82.00

▲(7.39%Upside)

Citigroup's overall score is driven by strong earnings results and technical strength, showing positive operating leverage and growth across business segments. However, financial performance is impacted by high leverage and negative cash flow, suggesting areas for improvement.

Positive Factors

Investment Banking

Citi plans to climb from the top 5 to the top 3 in investment banking fees, which should improve returns in banking.

Market Share Gains

Citi's banking line of business has shown market share gains, indicating progress and efficiency benefits related to its restructuring.

Regulatory Environment

Citi should benefit from changes in regulatory approaches, as new regulations may focus more on substance, potentially easing regulatory burdens.

Negative Factors

Credit Card Business

The credit card business continues to over-earn although net credit losses exceeded the high end of the range for Retail Services and at the high end for Branded Cards.

Credit Risk

Investors perceive credit risk tied to Citigroup's credit card book and concerns about below-average PPNR defensibility.

Revenue Slowdown

Services saw a slowdown in yoy revenue growth and decline qoq with Securities Services weaker.

Citigroup (C) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$146.39B

Dividend Yield2.86%

Average Volume (3M)11.16M

Price to Earnings (P/E)12.4

Beta (1Y)1.37

Revenue Growth2.97%

EPS Growth87.82%

CountryUS

Employees229,000

SectorFinancial

Sector Strength78

IndustryBanks - Diversified

Share Statistics

EPS (TTM)1.96

Shares Outstanding1,867,733,600

10 Day Avg. Volume10,892,897

30 Day Avg. Volume11,164,128

Financial Highlights & Ratios

PEG Ratio0.80

Price to Book (P/B)0.93

Price to Sales (P/S)0.00

P/FCF Ratio-9.89

Enterprise Value/Market Cap2.17

Enterprise Value/Revenue0.47

Enterprise Value/Gross Profit4.47

Enterprise Value/Ebitda4.23

Forecast

1Y Price Target

$88.75

Price Target Upside16.23% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

Citigroup Business Overview & Revenue Model

Company DescriptionCitigroup Inc., a diversified financial services holding company, provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. The company operates in two segments, Global Consumer Banking (GCB) and Institutional Clients Group (ICG). The GCB segment offers traditional banking services to retail customers through retail banking, Citi-branded cards, and Citi retail services. It also provides various banking, credit card, lending, and investment services through a network of local branches, offices, and electronic delivery systems. The ICG segment offers wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative, equity and fixed income research, corporate lending, investment banking and advisory, private banking, cash management, trade finance, and securities services to corporate, institutional, public sector, and high-net-worth clients. As of December 31, 2020, it operated 2,303 branches primarily in the United States, Mexico, and Asia. Citigroup Inc. was founded in 1812 and is headquartered in New York, New York.

How the Company Makes MoneyCitigroup generates revenue through a diverse range of financial services and products offered under its Global Consumer Banking and Institutional Clients Group segments. In the GCB segment, the company earns income from retail banking services such as deposits, loans, and mortgages, as well as credit card services where it charges interest and fees. The ICG segment generates revenue from investment banking activities, including advisory and underwriting services, trading and securities services, and lending to institutional clients. Additionally, Citigroup earns fees from asset management and private banking services. The company's global presence and extensive client network are significant factors contributing to its revenue generation capabilities. Citigroup's strategic partnerships and digital banking initiatives also play a crucial role in enhancing its service offerings and expanding its customer base.

Citigroup Key Performance Indicators (KPIs)

Any

Institutional Revenue Breakdown

Institutional Revenue Breakdown
Details revenue from institutional clients, highlighting Citigroup's performance in investment banking, trading, and other financial services for large organizations.

Chart InsightsCitigroup's Institutional Revenue shows robust growth in Treasury and Trade Solutions, with a notable surge in Securities Services in 2024. Fixed Income Markets remain volatile, while Equity Markets and Investment Banking are recovering, aligning with a 23% increase in equities revenue reported in the earnings call. Despite challenges in non-interest revenue, the bank's strategic focus on transformation and AI investments, coupled with strong capital returns, provides a positive outlook amidst macroeconomic uncertainties.

Data provided by:

Main Street Data

Citigroup Earnings Call Summary

Earnings Call Date:Apr 15, 2025

(Q1-2025)

% Change Since: 21.75%|

Next Earnings Date:Jul 15, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong quarter with significant growth in net income and revenues across various segments, particularly in wealth management and markets. However, challenges in non-interest revenue and a decline in retail services highlight areas of concern. Overall, the firm's strategic initiatives and strong capital returns provide a positive outlook despite macroeconomic uncertainties.

Q1-2025 Updates

Positive Updates

Strong Net Income and Revenue Growth

Reported net income of $4.1 billion and earnings per share of $1.96 with an ROTCE of 9.1%. Total revenues were up 3%, driven by growth in each of the businesses.

Positive Operating Leverage Across All Segments

Citi delivered its third consecutive quarter of positive operating leverage for each of its five lines of business and the fourth consecutive quarter for the firm overall.

Record Performance in Wealth Management

Wealth revenues were up 24%, with growth across Citi Gold, the private bank, and Wealth at Work. The segment delivered record revenue this quarter with improved efficiency and returns.

Strong Performance in Markets

Markets revenues were up 12%, with equities revenues increasing by 23% and fixed income revenues by 8%. This marks the fourth consecutive quarter of positive operating leverage in markets.

Increased Capital Return to Shareholders

Returned $2.8 billion in capital to shareholders, including $1.75 billion of buybacks, which is the highest quarterly amount since 2022.

Negative Updates

Challenges in Non-Interest Revenue

Non-interest revenues excluding markets were down 6% as better results in banking and wealth were more than offset by declines in all other segments, USPB, and services.

Retail Services Revenue Decline

Retail services revenues declined by 11%, primarily driven by higher partner payment accruals.

Macroeconomic Uncertainty and Credit Concerns

The firm faced a cost of credit of $2.7 billion, primarily consisting of net credit losses and a firm-wide net ACL build reflecting uncertainty and deterioration in the macroeconomic outlook.

Company Guidance

During the first quarter of 2025, Citi reported a net income of $4.1 billion, translating to earnings per share of $1.96 and a return on tangible common equity (ROTCE) of 9.1%. The bank achieved a 5% year-over-year decline in expenses and delivered positive operating leverage across its five business lines for the third consecutive quarter, and for the firm overall, for the fourth quarter. Revenues increased by 3% to $21.6 billion, driven by growth in each business segment. The services segment recorded its highest first-quarter revenue in a decade, while markets revenue rose 12%, with a notable 23% increase in equities. The banking division experienced a 12% revenue increase, partly due to M&A revenue nearly doubling. Wealth management revenues grew by 24%, driven by an 11% organic growth in client investments. US Personal Banking (USPB) saw a 2% uptick, supported by increased loan balances in branded cards. Citi returned $2.8 billion in capital to shareholders, including $1.75 billion in buybacks, and ended the quarter with a Common Equity Tier 1 (CET1) ratio of 13.4% and a tangible book value per share of $90. The bank remains focused on transformation investments and leveraging artificial intelligence to enhance client experience.

Citigroup Financial Statement Overview

Summary

Citigroup demonstrates strong profitability and revenue growth with a high net profit margin. However, challenges are evident with significant leverage indicated by a high debt-to-equity ratio and negative cash flow metrics, suggesting liquidity concerns.

Income Statement

Positive

Citigroup's TTM (Trailing-Twelve-Months) income statement reflects strong profitability with a high gross profit margin of 77.1% and a solid net profit margin of 13.6%. Revenue growth over recent years shows a positive trend with a 38% increase in TTM revenue compared to the previous annual period. However, the EBIT margin has seen some fluctuation, indicating potential volatility in operational efficiency.

Balance Sheet

Positive

Citigroup's balance sheet shows a high debt-to-equity ratio of 3.52, which suggests significant leverage. The equity ratio is relatively low at 8.3%, indicating a heavy reliance on debt financing. Despite this, the return on equity of 6.3% is moderate, suggesting adequate profitability relative to equity. The high level of cash and short-term investments provides a buffer against potential financial instability.

Cash Flow

Neutral

The cash flow statement reveals challenges with negative free cash flow and operating cash flow, indicating potential liquidity issues. The free cash flow to net income ratio is negative, highlighting a disconnect between profitability and cash generation. Citigroup's operating cash flow to net income ratio is also negative, which may signal inefficiencies in converting revenue into cash flow.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
168.15B	170.71B	70.70B	100.22B	79.87B	88.83B
	Gross Profit
71.25B	71.12B	67.90B	69.37B	75.78B	59.57B
	EBIT
18.99B	17.05B	26.38B	18.81B	27.47B	26.43B
	EBITDA
22.20B	21.36B	17.47B	23.07B	31.43B	17.57B
	Net Income Common Stockholders
13.38B	12.68B	9.23B	14.85B	21.95B	11.05B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.21T	1.02T	1.07T	1.15T	1.07T	1.14T
	Total Assets
2.57T	2.35T	2.41T	2.42T	2.29T	2.26T
	Total Debt
748.78B	590.56B	602.18B	521.15B	473.63B	500.73B
	Net Debt
440.45B	314.03B	341.25B	179.12B	211.60B	191.11B
	Total Liabilities
2.36T	2.14T	2.21T	2.21T	2.09T	2.06T
	Stockholders Equity
212.41B	208.60B	205.45B	201.19B	201.97B	199.44B
Cash Flow		Free Cash Flow
-73.96B	-26.17B	-80.00B	19.44B	57.13B	-24.07B
	Operating Cash Flow
-67.55B	-19.67B	-73.42B	25.07B	61.25B	-20.62B
	Investing Cash Flow
-27.58B	86.25B	-8.46B	-79.45B	-124.91B	-95.31B
	Financing Cash Flow
134.32B	-38.30B	687.00M	137.76B	17.27B	233.59B

Citigroup Technical Analysis

Technical Analysis Sentiment

Positive

Last Price76.36

Price Trends

50DMA

70.39

Positive

100DMA

73.05

Positive

200DMA

69.22

Positive

Market Momentum

MACD

1.72

Positive

RSI

56.54

Neutral

STOCH

66.68

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For C, the sentiment is Positive. The current price of 76.36 is above the 20-day moving average (MA) of 76.09, above the 50-day MA of 70.39, and above the 200-day MA of 69.22, indicating a bullish trend. The MACD of 1.72 indicates Positive momentum. The RSI at 56.54 is Neutral, neither overbought nor oversold. The STOCH value of 66.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for C.

Citigroup Risk Analysis

Citigroup disclosed 27 risk factors in its most recent earnings report. Citigroup reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Citigroup Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BAC	81 Outperform	$336.90B	13.35	9.46%	2.33%	8.23%	16.15%
HSBC	80 Outperform	$207.76B	10.98	10.83%	3.29%	-1.91%	-6.79%
JPM	78 Outperform	$745.21B	13.16	17.25%	2.09%	12.41%	23.05%
MUFG	76 Outperform	$154.59B	12.92	9.18%	1.96%	4.98%	21.03%
WFC	76 Outperform	$240.84B	13.00	11.05%	2.16%	3.51%	16.51%
C	74 Outperform	$146.39B	12.38	6.30%	2.86%	2.97%	87.82%
Sector *	64 Neutral	$12.93B	9.70	7.85%	78.03%	12.07%	-7.83%

* Financial Sector Average

Performance Comparison

Citigroup

76.36

18.97

33.05%

BAC

Bank of America

44.09

5.79

15.12%

HSBC

HSBC Holdings

59.18

18.54

45.62%

JPM

JPMorgan Chase

264.95

75.56

39.90%

MUFG

Mitsubishi UFJ

13.61

3.88

39.88%

WFC

Wells Fargo

72.36

16.31

29.10%

Citigroup Corporate Events

Executive/Board ChangesShareholder Meetings

Citigroup Stockholders Approve Key Amendments at Annual Meeting

Neutral

May 1, 2025

On April 29, 2025, Citigroup Inc. held its Annual Meeting of Stockholders where several key decisions were made. The stockholders approved an amendment to the Citigroup 2019 Stock Incentive Plan, increasing the authorized shares by 30 million. Additionally, 12 directors were elected, KPMG LLP was ratified as the independent accounting firm for 2025, and the 2024 Executive Compensation was approved. However, several stockholder proposals, including those on golden parachutes, Indigenous Peoples’ rights, climate change, and animal welfare, were not approved.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.