Where Does Citigroup Stand among Peers after Q3 Earnings?



Analysts’ recommendations

Wall Street analysts are bullish about Citigroup (C) and predict its stock price will grow in the low-twenty-percent range. The bank’s impressive track record of strong quarterly performances has instilled confidence among analysts, as we can see in their recommendations.

As of October 15, of the 29 analysts covering Citi stock, 21 have given it “strong buy” or “buy” recommendations, seven have given it “hold” recommendations, and one has given it a “sell” recommendation. Given Wall Street’s one-year forward target price of $85.02 on the stock, it has a potential upside of 21.7% from its current market price of $69.84.

Wall Street’s one-year forward target prices for JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), and Goldman Sachs (GS), other major banks (XLF), represent upsides of 14%, 22.6%, 19.4%, and 29%, respectively.

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Discounted valuation

In the year-to-date period, the stock has lost 6.1% of its value. The underperformance of Citigroup stock has made its valuations cheaper than those of its peers. Citigroup is currently trading at a price-to-book multiple of 0.95x, a massive discount to the industry average of ~1.5x. Peers JPMorgan Chase, Bank of America, Wells Fargo, and Goldman Sachs have price-to-book multiples of 1.57x, 1.18x, 1.38x, and 1.10x, respectively.

Based on one-year forward book value estimates, PBV multiples for JPMorgan, Bank of America, Wells Fargo, Goldman Sachs, and Citigroup are 1.45x, 1.09x, 1.34x, 0.98x, and 0.90x, respectively.

Citigroup’s one-year forward PE multiple is 9.45x, reflecting a lower valuation than the peer average of 14.7x. JPMorgan Chase, Bank of America, and Wells Fargo have one-year forward PE multiples of 10.85x, 10.05x, and 10.36x, respectively.


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