Citigroup Earnings: Stock Cheap on Book Value Basis as Eyes Turn to EPS Growth

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Citigroup Inc,Bank Of America Corp,Jpmorgan Chase & Co

Stocks Analysis by Brian Gilmartin covering: S&P 500, Citigroup Inc, Bank of America Corp, JPMorgan Chase & Co. Read Brian Gilmartin's latest article on Investing.com

Frankly, coming into Q1 ’24 earnings, the banking and financial services sector seems to be in pretty good shape from a credit perspective, with the possible exception of the regional banks and the commercial real estate issues, but net interest income should be stable to higher, net interest margins should be stable, loan losses contained, and with the prospect for Basel III regulatory reform cooling it seems like some of the regulatory fervor has diminished.

The stock is currently trading at a significant multiple discount to it’s expected growth rate, but the near-term issue might be how 2024 materializes.Citi is off to a great start in Q1 ’24, given the stock’s first-quarter performance vs the S&P 500. Jane Fraser has finally downsized the business to some extent, but we need to see the various Citi businesses generating sufficient returns.

Some of the segment analysis is a bit of a mess given all the divestitures and the bleeding off of some businesses, so hopefully the reporting improves as of the end of ’24. If Citi could be summed up in one sentence today, I’d say Jane Fraser is trying to transition Citi from a “cheap on a book value basis” to a bank that is “cheap on a PEG basis.”None of this is advice or a recommendation. Past performance is no guarantee of future results. Investing can involve loss of principal even for short periods of time. This information may or may not be updated, and if it is updated, it may not be updated in a timely fashion.

 

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