Citigroup Q1 Earnings Blow Previous Estimates; Goal Worth $83

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New York Metropolis-based funding financial institution Citigroup reported better-than-expected earnings for the primary quarter, largely pushed by enhancements within the macroeconomic outlook and decrease mortgage volumes.

Citigroup reported web revenue for the primary quarter 2021 of $7.9 billion, or $3.62 per diluted share, on revenues of $19.3 billion. This in comparison with web revenue of $2.5 billion, or $1.06 per diluted share, on revenues of $20.7 billion for the primary quarter 2020. That was increased than Wall Road’s consensus estimates of $2.56 per share.

Nonetheless, the financial institution’s income decreased 7% from the prior-year interval. Citigroup’s end-of-period loans had been $666 billion as of quarter-end, down 8% from the prior-year interval on a reported foundation and 10% excluding the affect of overseas change translation.

Citigroup shares, which slumped greater than 20% in 2020, rebounded over 17% thus far this 12 months.

Citigroup Inventory Worth Forecast

Fourteen analysts who supplied inventory rankings for Citigroup within the final three months forecast the common worth in 12 months of $83.31 with a excessive forecast of $117.00 and a low forecast of $66.00.

The common worth goal represents a 14.31% enhance from the final worth of $72.88. Of these 14 analysts, 9 rated “Purchase”, 5 rated “Maintain” whereas none rated “Promote”, in line with Tipranks.

Morgan Stanley gave the bottom goal worth of $89 with a excessive of $130 underneath a bull state of affairs and $50 underneath the worst-case state of affairs. The agency gave an “Obese” score on the funding financial institution’s inventory.

A number of different analysts have additionally up to date their inventory outlook. Barclays raised the value goal to $84 from $77. Piper Sandler lifted the goal worth to $93 from $89. Oppenheimer elevated the value goal to $117 from $112. UBS upped the value goal to $92 from $89. Credit score Suisse raised the value goal to $83 from $78.

Analyst Feedback

Citi is buying and selling at simply 0.8x NTM BVPS implying by means of the cycle ROE of simply 8%, properly beneath our 9% estimate for 2023. We imagine the inventory is reasonable even when bills associated to the Fed/OCC consent order stay elevated. We now have modeled in bills rising to $45B / $44B for 2021 / 2022 properly above $42B in 2019,” famous Betsy Graseck, fairness analyst at Morgan Stanley.

Citi additionally has #1 share in Transaction Banking, a enterprise we estimate delivers a ~35% ROTCE for Citi. We imagine Citi can add $17 a share in worth by disclosing full quarterly particulars on this enterprise. We bake half in $8, as Citi discloses half of what we want to see. Citi ought to get extra credit score for its international diversification and it’s extra resilient wholesale enterprise.”

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