TD Cowen has commenced coverage on Citi (C, Financial) with a Hold rating and has set a price target of $83. The firm has expressed a strongly positive outlook on large cap U.S. banks, noting that they are currently trading at historically low valuations—suggesting an undervaluation of at least 30%. According to the analyst, this sector is on the verge of experiencing significant earnings growth, better returns, and minimized risks as they transition into a new phase of optimization. TD Cowen also views a potential recession as a favorable event that may further enhance valuations. Additionally, the analyst believes these banks are positioned to spearhead advancements in artificial intelligence within the industry.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Citigroup Inc (C, Financial) is $83.97 with a high estimate of $110.00 and a low estimate of $70.00. The average target implies an upside of 11.53% from the current price of $75.29. More detailed estimate data can be found on the Citigroup Inc (C) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Citigroup Inc's (C, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Citigroup Inc (C, Financial) in one year is $60.91, suggesting a downside of 19.1% from the current price of $75.29. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Citigroup Inc (C) Summary page.
C Key Business Developments
Release Date: April 15, 2025
- Net Income: $4.1 billion.
- Earnings Per Share (EPS): $1.96.
- Return on Tangible Common Equity (RoTCE): 9.1%.
- Total Revenue: $21.6 billion, up 3% year-over-year.
- Expenses: $13.4 billion, down 5% year-over-year.
- Cost of Credit: $2.7 billion.
- Capital Returned to Shareholders: $2.8 billion, including $1.75 billion in buybacks.
- CET1 Capital Ratio: 13.4%.
- Tangible Book Value Per Share: $90.
- Services Revenue: Highest first-quarter revenue in a decade.
- Markets Revenue: Up 12%.
- Investment Banking Revenue: Up 12%, with M&A revenue nearly doubling.
- Wealth Revenue: Up 24%.
- US Personal Banking Revenue: Up 2%.
- Average Loans: Increased 1%.
- Average Deposits: Increased 2%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Citigroup Inc (C, Financial) reported a strong first quarter with net income of $4.1 billion and earnings per share of $1.96.
- The company achieved a 5% year-over-year decline in expenses, demonstrating disciplined expense management.
- Citigroup Inc (C) delivered its third consecutive quarter of positive operating leverage across all five business lines.
- The Services division recorded its highest first-quarter revenue in a decade, with significant growth in TTS and Security Services.
- The company returned $2.8 billion in capital to shareholders, including $1.75 billion in buybacks, showcasing a commitment to returning capital.
Negative Points
- The macroeconomic outlook is more negative than anticipated, with prolonged uncertainty potentially impacting confidence.
- Non-interest revenues, excluding markets, were down 6%, offsetting gains in banking and wealth.
- The firm's cost of credit was $2.7 billion, reflecting uncertainty and deterioration in the macroeconomic outlook.
- Corporate lending revenues declined 1% due to lower loan balances and higher recoveries in the prior year.
- Retail services revenues declined 11%, primarily driven by higher partner payment accruals.
