|
Related Topics
|
Category: Stock Market and CitiGroup (C)
Date: 16 April 2021 Stock Price of CitiGroup (C): $72.54 Market Capital of CitiGroup (C): $151.7 billion We take a look at the 1st quarter earnings report of their 2021 fiscal year of Citigroup one of the biggest financial institutions in the world with revenues of $19.3 billion and net income of $7.94 billion for the 4th quarter of their 2020 fiscal year.
|
Jane Fraser, Citi CEO - It’s been a better than expected start to the year, and we are optimistic about the macro environment. We are committed to serving our clients through the recovery and positioning the bank for a period of sustained growth."
About Citigroup
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Overview of Citigroup's 1st quarter 2021 earnings report
1st quarter 2021 earnings highlights
- Net Income of $7.9 Billion ($3.62 per Share)
- Revenues of $19.3 Billion
- Returned $2.7 Billion of Capital to Common Shareholders
- Repurchased 23 Million Common Shares
- Book Value per Share of $88.18
- Tangible Book Value per Share of $75.504
Citigroup's management commentary on their 1st quarter 2021 earnings report
New York – Citigroup Inc. today reported net income for the first quarter 2021 of $7.9 billion, or $3.62 per diluted share, on revenues of $19.3 billion. This compared to net income of $2.5 billion, or $1.06 per diluted share, on revenues of $20.7 billion for the first quarter 2020.
Jane Fraser, Citi CEO, said, “It’s been a better than expected start to the year, and we are optimistic about the macro environment. We are committed to serving our clients through the recovery and positioning the bank for a period of sustained growth.
“We reported record net income driven by strong performance in our Institutional Clients Group and a significant release from our Allowance for Credit Losses, as a result of the improving economic outlook. While Global Consumer Banking revenues were down quarter-over-quarter as a result of the pandemic, this is the healthiest we have seen the consumer emerge from a crisis in recent history.
Jane Fraser, Citi CEO, said, “It’s been a better than expected start to the year, and we are optimistic about the macro environment. We are committed to serving our clients through the recovery and positioning the bank for a period of sustained growth.
“We reported record net income driven by strong performance in our Institutional Clients Group and a significant release from our Allowance for Credit Losses, as a result of the improving economic outlook. While Global Consumer Banking revenues were down quarter-over-quarter as a result of the pandemic, this is the healthiest we have seen the consumer emerge from a crisis in recent history.
“Our capital levels remained strong and stable, allowing us to respond to the needs of our clients and return capital to our shareholders. At 11.7%, our Common Equity Tier One Ratio was unchanged from the fourth quarter and we resumed the repurchase of common stock, which we had voluntarily paused at the onset of the pandemic."
Jane Fraser, Citi CEO, said, “As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth. We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centers, Singapore, Hong Kong, UAE and London. This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.
“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia. We will continue to update you on strategic decisions as we make them while we work to increase the returns we deliver to our shareholders,” Fraser concluded.
Jane Fraser, Citi CEO, said, “As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth. We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centers, Singapore, Hong Kong, UAE and London. This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.
“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia. We will continue to update you on strategic decisions as we make them while we work to increase the returns we deliver to our shareholders,” Fraser concluded.
Citigroup (NYSE: C) stock price chart over the last 5 years
The image below shows the stock price history of Citi (C) over the last 5 years. And its been a good time for Citi (C) stockholders with the stock increasing by 63% over the last 5 years. No investor would say no to those kind of returns.
The stock of Citi (C) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Citi's stock is positive at this point in time.
The stock of Citi (C) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Citi's stock is positive at this point in time.
Citigroup (C) stock vs JPMorgan Chase (JPM) stock vs Bank of America (BAC) over the last 5 years
The image below shows the stock price performance of Bank of America (BAC), Citigroup (C) or JPMorgan (JPM) over the last 5 years. All of these firms are giants in the US banking and financial services sector. While they all operate in the financial services sector their stock price trends and returns over the last 5 years is very different. The summary below shows the stock price returns of the three financial services providers over the last 5 years, sorted from best to worst performer:
So Bank of America has been by far the best performer over the last 5 years while Citigroup has been by far the worst.
- Bank of America (BAC): 178.9%
- JPMorgan (JPM): 143.7%
- Citigroup (C): 62.6%
So Bank of America has been by far the best performer over the last 5 years while Citigroup has been by far the worst.
Citigroup (NYSE: C) latest stock valuation
So what is Citigroup stock worth based on the release of their 1st quarter 2021 earnings report? Based on Citigroup's latest earnings report our valuation models provide a target price (full value price) for Citigroup stock at $98.40 a stock. We therefore believe that the stock of Citigroup is significantly undervalued at its current price of $72.54
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $98.40. Therefore we believe a good entry point into Citigroup stock is at $88.60 or below.
Since the stock of Citigroup is selling at well below our target price (full value price) and our suggested entry point we rate the stock of Citigroup as a buy
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $98.40. Therefore we believe a good entry point into Citigroup stock is at $88.60 or below.
Since the stock of Citigroup is selling at well below our target price (full value price) and our suggested entry point we rate the stock of Citigroup as a buy
Next earnings release date for Citigroup
It is expected that Citigroup (NYSE: C) will release their 2nd quarter 2021 earnings report in mid July 2021