Shares of Citigroup (C) were up 29.5% on a YTD (year-to-date) basis as of April 12. Growth in lending and higher deposits are expected to drive Citigroup’s net interest income even in the absence of a rate hike.
Operating leverage and share repurchases are expected to support the bank’s earnings. However, lower trading revenue, a pause on rate hikes, and tough YoY (year-over-year) comparisons could restrict its revenue and EPS growth.
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Despite its recent uptrend, Citigroup stock is trading at a lower forward PE multiple than most of its peers, which could further support its uptrend.
Citigroup stock is trading at a forward PE multiple of 8.9x, which looks attractive given its projected EPS growth of ~12% in 2019. Shares of JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), and Goldman Sachs (GS) are trading at forward PE multiples of 11.1x, 9.3x, 10.5x, and 9.0x, respectively.
Ratings and target price
Of the analysts covering Citigroup stock, 22 have given it “buy” ratings, five have given it “holds,” and one has given it a “sell” rating. Analysts have a target price of $77.60 on Citigroup stock, which implies a potential upside of ~15%.