Citigroup (C) is expected to report Q1 earnings before the market open on Friday, April 17 with a conference call scheduled for 8:30 am ET.
Guidance
The consensus estimate is (34c) for EPS and $21.94B for revenue. The consensus range is ($1.14)-10c for EPS and $14.96B-$26.22B for revenue, according to First Call. Citigroup has said that it was profitable during the first two months of Q1. The bank is expected to soon convert its preferred shares held by the U.S. government into common stock.
Analyst Views
Oppenheimer recommends that investors who want exposure to Citigroup move from the bank's common shares into its preferred stock. The firm believes that investors who do that would be essentially buying Citigroup stock for $2.65 per share. Meanwhile, some Citigroup investors are becoming increasingly worried about the bank's creditworthiness, the NY Times reported Thursday. Investors are concerned that the bank is too big for the government to continue supporting, the newspaper claimed. Citigroup may look to obtain takeover bids for its investment banking unit on April 20, Reuters recently quoted sources as saying. Citigroup, along with at least 11 of the nation's largest financial institutions, may be forced by the government to sell some of its "toxic" assets for as little as 32c on the dollar if it fails the government's stress test this month, Bloomberg reported. Investors will want to determine whether both of these reports are true and if so, how these developments would affect the company's capital levels and results going forward.
Meanwhile, several commentators have issued negative assessments of large banks in recent weeks. The U.S. banking system is "basically insolvent," billionaire investor George Soros said, according to CNBC. CLSA analyst Mike Mayo, formerly with Deutsche Bank, initiated Citigroup and the entire banking sector with Underperform ratings. Mayo, who cited an increase in the amount of problematic loans as the main reason for his ratings, believes banks' loan losses may exceed Great Depression levels.
