On Thursday, CFRA, a notable financial research firm, updated its outlook on Citigroup Inc. (NYSE: NYSE:C), raising the bank's price target from $67.00 to $71.00 while maintaining a Buy rating. The adjustment reflects a more generous price-to-earnings (P/E) multiple of 11.5 times CFRA's estimated earnings per share (EPS) for 2024. This valuation is still below the 12.5 times average P/E multiple of Citigroup's peers.
Citigroup is currently trading at a 23% discount to its net tangible book value (NTBV) of $81.65. CFRA has reaffirmed its EPS forecasts for Citigroup, keeping them steady at $6.20 for 2024 and $7.25 for 2025. The firm's analysts support Citigroup's ongoing strategic transformation and are optimistic about the bank's potential for growth, particularly in institutional markets.
The bank's leading positions in corporate treasury services, technology platforms, and global wealth expansion are key factors in CFRA's positive stance. The analysts believe that Citigroup is well-placed to narrow the gap between its current share price and NTBV. This optimism is partly based on the performance of Citigroup's Services segment, which includes treasury and trade solutions and reported an 8% increase in fee revenue in the first quarter compared to the same period last year.
Despite a modest 1% year-over-year rise in net interest income in the first quarter, CFRA highlighted Citigroup's efforts to streamline its operations. This includes plans to exit consumer banking in Mexico by 2025 and the sale of 14 non-U.S. consumer banks. These moves are part of Citigroup's broader strategy to refine its focus and improve its financial performance.
InvestingPro Insights
As Citigroup Inc. (NYSE: C) undergoes strategic transformations and receives updated outlooks from financial research firms, real-time data from InvestingPro provides further context for investors considering the bank's stock. Citigroup's market capitalization stands at a robust $120.32 billion, reflecting the scale of its operations. Despite a slight revenue contraction of 2.4% over the last twelve months as of Q1 2024, the company has demonstrated a substantial price performance with a 45.06% one-year total return, closely approaching its 52-week high at 96.88% of the peak value.
With a P/E ratio of 18.32, Citigroup trades at a premium compared to CFRA's projected P/E multiple, which suggests that the market may be pricing in future growth expectations or a stronger earnings outlook than anticipated. The bank's commitment to maintaining dividend payments for 14 consecutive years, as highlighted by an InvestingPro Tip, is a testament to its financial stability and may appeal to income-focused investors. The dividend yield currently stands at 3.32%, coupled with a 3.92% dividend growth over the last twelve months, aligning with the bank's reputation as a prominent player in the industry.
Investors looking to delve deeper into Citigroup's financial health can explore additional InvestingPro Tips, which provide insights on aspects such as cash flow and profit margins. For those considering an investment, using coupon code PRONEWS24 can secure an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering access to a wealth of financial data and analysis to inform their decisions. With 11 more InvestingPro Tips available, investors have ample resources at their disposal to assess Citigroup's prospects comprehensively.
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