Earnings Preview: Citigroup Inc

| About: Citigroup Inc. (C)
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Company Profile

Citigroup Inc., a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings.

Citigroup (NYSE:C) is scheduled to report its second quarter earnings results on July 16, 2012, before market open.

Technical Overview

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Citigroup has a market cap of $75.88 billion and it is currently trading around $25.88 with a 52 week range of $21.40 to $41.40. The stock has fallen 1.63% year to date. The following table provides the key financial ratios for Citigroup:

Key Ratio Value
PEG 0.84
P/E 7.25
Forward P/E 5.68
Profit Margin 14.27%
Return On Assets (ROA) 0.57%
Return On Equity (ROE) 6.08%

Recent News

  • On June 29, 2012, Citi announced the successful completion of the sale of EMI Music Publishing to an investor group comprised of Sony Corporation of America (NYSE:SNE), the Estate of Michael Jackson, Mubadala Development Company PJSC, Jynwel Capital Limited, the Blackstone Group's (NYSE:BX) GSO Capital Partners LP, and David Geffen.
  • On June 21, 2012, Citi announced that they strongly disagrees with Moody's analysis of the banking industry and firmly believes its downgrade of Citi is arbitrary and completely unwarranted. Moody's approach is backward-looking and fails to recognize Citi's transformation over the past several years, the strength and diversity of Citi's franchise, and the substantial improvements in Citi's risk management, capital levels and liquidity.
  • On June 12, 2012, the U.S. Agency for International Development (USAID) and Citi announced a global partnership to broaden financial inclusion by fostering the rapid adoption of "mobile money" technology in developing countries.
  • On May 25, 2012, Citigroup announced it has sold 404 million common shares in Akbank T.A.S. through an equity offering representing 10.1% of the equity interest in the company for TRY5.24 per share. Total proceeds from the transaction are expected to be approximately $1.15 billion at the current exchange rate, resulting in an after-tax loss of approximately $243 million in the second quarter.
  • On April 18, 2012, Citigroup announced that the Board of Directors of Citigroup declared a quarterly dividend on the company's common stock of $0.01 per share, payable on May 25, 2012 to stockholders of record on May 7, 2012.

Here's a list of recent changes to analyst ratings:

  • On July 9, 2012, Thomson Reuters/Verus upgraded Citigroup from HOLD to BUY.
  • On June 11, 2012, Thomas White/Global Capital downgraded Citigroup from FAVORABLE to NEUTRAL.
  • On June 8, 2012, Ford Equity Research downgraded Citigroup from BUY to HOLD.
  • On June 7, 2012, Audit Integrity, Inc upgraded Citigroup from 1 to 2.
  • On June 5, 2012, Raymond James' Anthony Polini downgraded shares of Citi from STRONG BUY to OUTPERFORM.
  • On May 28, 2012, Thomson Reuters/Verus downgraded Citigroup from BUY to HOLD.
  • On May 21, 2012, JMP's David Trone downgraded Citi from MARKET PERFORM to MARKET UNDERPERFORM and set the price target as $23.00.
  • On April 30, 2012, Thomson Reuters/Verus upgraded Citigroup from HOLD to BUY.
  • On April 27, 2012, Ativo Research downgraded Citigroup from UNFAVORABLE to MOST UNFAVORABLE.
  • On April 23, 2012, Thomson Reuters/Verus downgraded Citigroup from BUY to HOLD.
  • On April 20, 2012, Ford Equity Research upgraded Citigroup from NEUTRAL to FAVORABLE.
  • On April 19, 2012, Zacks Investment Research, Inc. upgraded Citigroup from SELL to HOLD.
  • On April 16, 2012, Standard & Poor`s upgraded Citigroup from 3-STAR to 4-STAR.

Analyst Guidance and Earnings History

The second quarter revenues are expected to be $18.95 billion when compared to $20.62 billion for the same quarter last year. Earnings per share for the second quarter are expected to be 90 cents a share, down from $1.09 a share in the year-ago period.

The average price target from analyst for Citigroup is $39.73 with average rating is OVERWEIGHT.

Out of the last 4 quarters, Citigroup has met or exceeded the EPS estimates 3 times. The following chart shows the Analyst estimates history and the actual EPS results:

The following chart shows the annual summary of sales and net income for Citigroup:


Wells Fargo & Company (NYSE:WFC), Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co (NYSE:JPM) and Goldman Sachs (NYSE:GS) are considered as major competitors for Citigroup and the table below provides the key metrics for these companies:

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclosure: I am long BAC.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research. The information and data is believed to be accurate, but no guarantees or representations are made.