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Citigroup (C) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Citigroup (C) closed at $68.21 in the latest trading session, marking a -1.76% move from the prior day. This change lagged the S&P 500's 0.38% loss on the day. Meanwhile, the Dow lost 0.46%, and the Nasdaq, a tech-heavy index, added 0.17%.

Coming into today, shares of the U.S. bank had lost 10.11% in the past month. In that same time, the Finance sector lost 4.51%, while the S&P 500 lost 4.88%.

Investors will be hoping for strength from C as it approaches its next earnings release, which is expected to be April 15, 2020. The company is expected to report EPS of $2.15, up 14.97% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $19.20 billion, up 3.34% from the prior-year quarter.

C's full-year Zacks Consensus Estimates are calling for earnings of $8.66 per share and revenue of $75.68 billion. These results would represent year-over-year changes of +14.25% and +1.88%, respectively.

Any recent changes to analyst estimates for C should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% higher. C is currently a Zacks Rank #2 (Buy).

In terms of valuation, C is currently trading at a Forward P/E ratio of 8.02. For comparison, its industry has an average Forward P/E of 10.45, which means C is trading at a discount to the group.

Investors should also note that C has a PEG ratio of 0.76 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Banks - Major Regional was holding an average PEG ratio of 1.3 at yesterday's closing price.

The Banks - Major Regional industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow C in the coming trading sessions, be sure to utilize Zacks.com.


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