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C 2X 2020

|About: Citigroup Inc. (C)
Summary

Target price: $130(2x) in 2020, 26% CAGR.

P/B .85 PE 10.

Company is more efficient, prepared to survive downtown.

Q1 '19 Operation:                                                                                                    -Moves the most institutional money in the world. Use receivables/payable data to move money efficiently.                                                                    -World's largest issuer of cards                                                                     -Investing R&D in fintech                                                                             -50% revenue is movement of institutional money, treasury and trade solution. 50% revenue from global consumer banking(50% US, 50% global)    -Emerging market is growing 2x the pace of developed markets. 2005 only 9% of Fortune 500 companies were in emerging market. That # has increased to 30% in 2016. C is involved in >75% of those companies.                               -Costco receivables $11B, 600 stores.                                                           -Strives for 11.5% tier 1 capital. Excess capital to be returned to shareholders in form of buybacks/dividends.                                                                      -Deploying credit & expense discipline                                                           -Well prepared for a downturn d/t to regulations and company initiatives.

 Trimming the fat:                                                                                     -Becoming just a bank, shed $800M of non core assets which had the potential to lose billions in a quarter.                                                                          -Cut 70 businesses: asset management, hedge fund, insurance company, etc. Cut 40k jobs. This increased ROA 60-->80%.                                          -Allocating money to markets w/ best returns. Reduced consumer footprints from 40--> 19 markets w/ focus on US, Mexico, China.

Valuation:                                                                                                 -$5eps per analyst guidance                                                                         -$10eps per company guidance                                                                     Extra $4 is from...                                                                                -50% $2 buybacks                                                                                       -40% $1.6 organic growth                                                                            -10% $1 based on 1 rate hike/year                                                               $10 w/ a PE ratio of 13-->$130.

Revenue/Earning growth 6% annually over the past 5 years, returning 13% of market cap annually in dividends/buybacks.                                 Management-Corbat has a cubicle. In a time of rebuilding, does not want to ask people to give up their offices if he isn't willing to.

Disclosure: I am/we are long C.