Shares of Citigroup C added 0.9% during regular hours Thursday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed excitement ahead of the report, and this is certainly still a stock to watch once the full results are in.
With rising interest rates, tax cuts, and a strong economy, the stage seems set for strong earnings numbers from big banks. However, a flattening yield curve has the market concerned about the makings of the next recession. This means that the pressure is on for Citigroup to post strong earnings and ease potential investor tensions.
According to our latest Zacks Consensus Estimates, analysts expect Citigroup to report earnings of $1.54 per share on $18.43 billion in revenue. These results would mark year-over-year growth rates of 21% and 3%, respectively.
Investors should also note that C’s consensus earnings projection has trended downward over the course of the quarter. Multiple negative revisions have caused the Zacks Consensus Estimate to tick four cents lower in the past 90 days. It has seen two positive revisions, one in the last 60 days and the other in the last 30. However, 10 negative revisions have also been made in the last 60 days, with 2 more coming in just the last week. This mixed revision activity has contributed to the stock’s Zacks Rank #3 (Hold).
Looking at share price performance, C has added about 2.4% over the past year. However, the stock has performed poorly as of late, losing nearly 8% on a year-to-date basis. More recently, shares have dropped about 3.5% over the trailing 12 weeks.
A strong earnings beat might be what C needs in order to start turning things around. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
C currently has an Earnings ESP of -0.73%. This, combined with its Zacks Rank, leave us inconclusive about its chances at beating earnings estimates on Friday. It is also worth noting that Citigroup has notched 13 quarters of earnings outperformance in a row.
Make sure to check back here for our full analysis once Citigroup reports!
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