|
Related Topics
|
Category: Stock Market and Citi Group
Date: 14 January 2020 Stock Price: $82.81 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Citigroup one of the biggest financial institutions with its fourth quarter 2019 revenues topping $18.3 billion and the group has more than 200 million clients worldwide.
|
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 4th quarter 2019 earnings report
Data below refers to quarterly data unless specified otherwise:
- Revenue: $18.378 billion (up from $17.124 billion for the same period of the previous year)
- Revenues increased by 7% over the last 12 months
- Operating costs and expenses : $10.454 billion (up from $9.893 billion for the same period of the previous year)
- Operating costs and expenses increased by 6% over the last 12 months
- Net income: $4.979 billion (up from $4.313 billion for the same period of the previous year)
- Diluted earnings per share: $2.15 (up from $1.64 for the same period of the previous year)
- PE ratio of Citigroup: 10.3
- Dividend yield of Citigroup: 2.5%
- Diluted weighted-average shares outstanding: 2.166 billion (down from 2.402 billion for the same period of the previous year)
- Book value per share: $82.90 (up 10% from $75.05 for the same period of the previous year)
- Cash and cash equivalents: $23.967 billion
- Cash and cash equivalents per share: $11.07
- Cash and cash equivalents makes up 13.36% of Citigroup's market capital
- Cash and cash equivalents makes up 1.22% of Citigroup's total assets
- Loans net of allowances for losses: $686.7 billion
- Loans net of allowances makes up 35.2% of Citigroup's total assets
- Goodwill: $22.126 billion
- Goodwill makes up 1.13% of Citigroup's total assets
- Goodwill per stock: $10.21
- Stockholders equity in Citigroup: $193.946 billion
- Stockholders equity per share: $89.00
- So Citigroup is trading a 0.93 times its stockholders equity which is well outside the expected range of between 2 and 4 which most firms tend to trade at.
Citigroup's management commentary on their 4th quarter 2019 earnings report
New York – Citigroup Inc. today reported net income for the fourth quarter 2019 of $5.0 billion, or $2.15 per diluted share, on revenues of $18.4 billion. This compared to net income of $4.3 billion, or $1.64 per diluted share, on revenues of $17.1 billion for the fourth quarter 2018.
Citi CEO Michael Corbat said, “Our earnings of $5 billion for the fourth quarter marked a strong finish to 2019. Our full year Return on Tangible Common Equity of over 12% exceeded our target. Due to good client engagement, we drove balanced growth across our products and geographies, closing the year with 16 consecutive quarters of loan and deposit growth. The U.S. consumer franchise saw continued strong growth in Branded Cards and sustained its momentum in attracting digital deposits. Investment Banking continued to gain share and, despite a lower rate environment, Treasury and Trade Solutions grew revenue as we work to ensure our global network remains indispensable to our clients. With increased revenues and disciplined expense management, we had positive operating leverage, even as we continued to make significant investments in the franchise.
Citi CEO Michael Corbat said, “Our earnings of $5 billion for the fourth quarter marked a strong finish to 2019. Our full year Return on Tangible Common Equity of over 12% exceeded our target. Due to good client engagement, we drove balanced growth across our products and geographies, closing the year with 16 consecutive quarters of loan and deposit growth. The U.S. consumer franchise saw continued strong growth in Branded Cards and sustained its momentum in attracting digital deposits. Investment Banking continued to gain share and, despite a lower rate environment, Treasury and Trade Solutions grew revenue as we work to ensure our global network remains indispensable to our clients. With increased revenues and disciplined expense management, we had positive operating leverage, even as we continued to make significant investments in the franchise.
“We ended 2019 with a Common Equity Tier One ratio of 11.7% and we are on track to deliver our commitment of returning over $60 billion of capital to our shareholders over a three-year period. We enter 2020 in a strong competitive position, from capital and liquidity to talent and technology. We continue to invest in areas where we see opportunities for client-led growth and in our infrastructure, in light of the enduring need to be an indisputably strong and stable institution,” Mr. Corbat concluded.
Citigroup (NYSE: C) stock price history
The image below, obtained from Google, shows the stock price history of Citigroup over the last 5 years. And it's been a pretty good time for Citigroup stockholders. 5 years ago the stock was trading at around $47.60 a stock and its currently trading at $82.81 a stock. That's a impressive return of 73.9% returned to Citigroup stockholders over the last 5 years.
The stock of Citigroup is trading at very close to its 52 week high of $83.11 than it is to its 52 week low of $55.70 which to us is an indication that the momentum and sentiment of Citigroup stock is very positive at the moment.
The stock of Citigroup is trading at very close to its 52 week high of $83.11 than it is to its 52 week low of $55.70 which to us is an indication that the momentum and sentiment of Citigroup stock is very positive at the moment.
Recent coverage of Citigroup
The extract below discusses the latest regarding Citigroup as obtained from TheStreet.com
Citigroup (C) - Get Report beat fourth-quarter earnings estimates on strong profits in its fixed-income trading group. The stock opened Tuesday at $81.20 and traded as high as $82.63 in the first half hour of trading. That set a multiyear high with upside potential to its annual risky level at $94.40. My call is to be patient and buy weakness to the 200-day simple moving average at $70.09 and reduce holdings on strength to its annual risky level at $94.40.
It appears that an easing to the Volcker rule which intended to limit proprietary trading now allows Citigroup's primary dealer group to take advantage of the volatility in the U.S. Treasury market as yields gradually rose during the fourth quarter.
Read the full article here
Citigroup (C) - Get Report beat fourth-quarter earnings estimates on strong profits in its fixed-income trading group. The stock opened Tuesday at $81.20 and traded as high as $82.63 in the first half hour of trading. That set a multiyear high with upside potential to its annual risky level at $94.40. My call is to be patient and buy weakness to the 200-day simple moving average at $70.09 and reduce holdings on strength to its annual risky level at $94.40.
It appears that an easing to the Volcker rule which intended to limit proprietary trading now allows Citigroup's primary dealer group to take advantage of the volatility in the U.S. Treasury market as yields gradually rose during the fourth quarter.
Read the full article here
Citigroup (NYSE: C) latest stock valuation
So what is Citigroup stock worth based on the release of their 4th quarter 2019 and full fiscal 2019 earnings earnings report? Based on Citigroup's latest earnings report our valuation models provide a target (full value) price for Citigroup stock at $108.10 a stock. We therefore believe that the stock of Citigroup is significantly undervalued at its current price of $82.81
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 $108.10 Therefore we believe a good entry point into Citigroup stock is at $97.30 or below. Since the stock of Citigroup is selling at well below our target (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 $108.10 Therefore we believe a good entry point into Citigroup stock is at $97.30 or below. Since the stock of Citigroup is selling at well below our target (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) 1st quarter 2020 earnings report will be released in the middle of April 2020