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Citigroup (C) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
JB Hunt (JBHT) delivered earnings and revenue surprises of 1.48% and -0.63%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, Citigroup (C) closed at $66.54, marking a -1.39% move from the previous day. This move lagged the S&P 500's daily gain of 0.09%. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.62%.

Heading into today, shares of the U.S. bank had gained 2.27% over the past month, outpacing the Finance sector's gain of 1.07% and the S&P 500's gain of 2.08% in that time.

C will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.86, up 14.81% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $18.70 billion, up 1.24% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.60 per share and revenue of $74.08 billion, which would represent changes of +14.29% and +1.69%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for C. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. C is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, C is currently trading at a Forward P/E ratio of 8.88. This represents a discount compared to its industry's average Forward P/E of 10.99.

It is also worth noting that C currently has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Banks - Major Regional was holding an average PEG ratio of 1.33 at yesterday's closing price.

The Banks - Major Regional industry is part of the Finance sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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