Stock in Focus: Citigroup Inc. (C)

Company Profile:

Citigroup 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.

Recent News:

Citigroup Inc. reported net income for the third quarter of $3.5 billion, or $1.63 per share, down 25% from $4.6 billion, or $2.15 per share, a year ago. Third-quarter revenue grew 6% to $18.5 billion from $17.4 billion in last year’s quarter primarily due to the gain on sale of the bank’s Philippines consumer business versus a loss on sale of its Australia consumer business in the prior-year period.

On Oct 14, Citigroup took a $110 million writedown on leveraged loans in the third quarter, the company said on Friday as its Wall Street competitors downplayed their exposure to the sector.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects:

Price to Book Value – P/BV, a ratio used to compare book value to its current market price, to gauge whether a stock is valued properly.

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Price to Earnings – PE, the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

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Discounted cash flow – DCF, a valuation method used to estimate the value of an investment based on its expected future cash flows.

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Return on Assets – ROA, indicates how profitable a company is in relation to its total assets, how efficiently uses assets to generate a profit.

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Return on Equity – ROE, a measure of financial performance calculated by dividing net income by equity. a gauge of profitability and efficiency.

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Debt to Equity – evaluate financial leverage, reflects the ability of equity to cover outstanding debts in the event of a business downturn.

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Conclusion:

C receives outperform rating in price to earnings, discounted cash flow and debt to equity. Technical indicators signal the bullish signs, as there is a bullish crossover in the MACD and Stochastic oscillator. The RSI(14) stands at 44 with positive bias. We rate Citigroup Inc. (C) a BUY.