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Citigroup Inc. (C)
NYSE - NYSE Delayed price. Currency in USD
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At close: 4:02PM EDT
8,905 reactions on $C conversation
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Market Cap ****************** $93.39
P/E (Trailing Twelve Months): 7.73
P/E (5-Year Average) ********: 8.21
Enterprise Value ************: $136.05B
Price/Cash Flow (TTM) *****: 5.38 ************* Other banks: 9
Price/Sales (Most Recent Quarter): 1.00 ***** Other banks: 2.11
Price/Sales (TTM) ******************: 0.94 ****** Other Banks: 2.02
Price/Book *************************: 0.54 ****** Other Banks: 1.07
Book Value *************************: 92.04
The stock still has room to go down as there is no sight of selling to abate. On top algorithms will definitely overshoot on the downside as they chase market volumes. After Wells Fargo scandal the weakest link in large banks has been identified and quants will surely do their job. It is not even worth to predict at what levels the price could find some stabilization. Additionally, if market corrects on some negative macroeconomic surprises quant beta trackers will eventually push bank stock prices even lower. There is little to none of any idiosyncratic catalysts ahead for Citi at least till the second half of 2021. Yesterday Marc Mason sounded like a well trained Harvard MBA graduate rather than an experienced banker with insight how to fix Citi's strategic and operational problems in timely manner. Just regular comments that environment is uncertain, reserve build, slow consumer activity, investment in tech infrastructure etc. Years of massive investments in new technology have not delivered expected benefits to operatinal leverage particularly in retail banking and he still sings the same song. At least he could have outlined some new initiatives under considerations but pretty much it is all the same - updated technology and real estate footprint. Banking is a business which is about lending and execution with solid credit and risk control. If you invest billions of dollars in new technology that is not delivering incremental benefits in a tradeoff between productivity and cost, not delivering opportunities to monetize on client needs, it is all waste of shareholder value. Surely it may please US regulators and in case of Citi even that is not happening again. Hopefully, Jane will look at all that and come up with some better strategic ideas. I have doubts but who knows.
how 3 months old news without ant loss can down stock more than 10% within 24 hours ?
The more i review Citi's consumer bank results in the past years and quarters, the trickier to see how the bank could improve margins in North America geography. It is true that their efficiency compared to Mexico and Asia is the highest but returns on average assets are lower than the ones with the rivals. Digitization and reduced physical footprint could allow them to keep costs down in this business but the bank has not been gaining better operating leverage even with substantial technology investments for years with the exception of the last quarter before coronavirus hit USA. Of course I believe that it is the case for Citi that their strategy for higher credit profile consumers could somewhat reduce their potential to earn interest on credit balances. To add a little bit of risk to credit card portfolio the bank went for purchasing and partnerships with large retailers like Costco and Best Buy in cobranded card agreements. This could play well in times of economic distress as losses are shared on mutual basis. However during expansion the bank earns less as profits are also split between partners. The underlying dynamics could be less credit losses in downturn and reduced earnings potential during expansion. While scalability and volumes could somewhat compensate for reduced revenue potential, investors have not yet seen it. In consumer bank Citi operational results were uneven and with little stable growth. On the other hand, overseas consumer bank operations have shown consistent higher returns on average assets although with less efficiency. They have potential to deliver better efficiency through cutting cost or gain market share and volumes. In North America Citi seems having hard times to attract new customers and businesses due to competition and credit strategy. While digitization attracted billions of dollars in deposits and cheap funding, so far it has not flown into visible monetization for Citi. I suspect that one reason is their reduced physical presence. Banking is a culture of having face to face communication with a client. Generation Z or people who like to manage their earnings and savings through gadgets and cell phones are very unlikely to deliver good monetization potential and business volumes to banks.
It is very intriguing to know what Jane sees in new opportunities and initiatives to improve returns in this business.
Frankley, I sleep better buying Citi at today's price than Aapl or any tech stock now. Banks are very undervalued. Slow and steady but great upside in the mid to long term.
Until we see earnings all of this is meaningless and can reverse very quickly. A letter from the government or a fine of this caliber has little impact on its long-term earnings trajectory. If loan losses are less than initially estimated (and it appears we are heading there), this will fly. Funds will be buying tomorrow. Remember $6.50 EPS in 2021 is the current conservative estimate.
With ValueAct fund's active role, Citi will now move upward. Read this from today's CNBC post. If C behaves like, MSFT, we should have almost 10-fold increase in the stock price. "ValueAct never called for the removal of Corbat, according to the people with direct knowledge of their interactions. Instead, the firm, led by partner Dylan Haggart, was vocal with the bank’s board and management on the company’s shortcomings, creating tension internally and a situation where the company’s operators knew they were underperforming.
The best analogy for this was the role ValueAct had in prompting Microsoft CEO Steve Ballmer to retire after it took a stake in the tech giant in 2013, paving the way for Satya Nadella’s successful tenure, according to one of the people.
ValueAct prides itself on a reputation within the industry for working with management in a transparent way, giving feedback and getting more involved only when necessary. The hedge fund has had a data sharing agreement with the bank since early 2019, giving it access to board members and non-public information.
After CNBC reported last week that investor patience with the bank had worn thin, ValueAct managers were concerned that other CEOs who worked with the activist would get the misimpression that they had explicitly pushed for Corbat’s removal...."
Fed will release stress test end of September. Will dictate whether banks can increase dividends or start buybacks. I’m sure stimulus from government will make or break this.
The fed will probably crush the banks and feed more QE to 100 PE tech bubbles. Citibank will probably be sanctioned and sold to JPM for 50 cents.
A few years ago I would have been one of the panic sellers yesterday, until I learned how they fleece you out of your shares, and then how quickly they run it up. Instead of a seller I was a buyer.
People missed the chance earlier this year to buy low, here you are, sale and discounted price before vaccine and economy recovery
New CEO will get stock options priced at all time low... nice planning. I've seen this before.
We lost $6 x 2.1B outstanding shares = around $13B in 2 days which is 1 years worth of earnings. Sick
C is one of the safest banks today and is well capitalised. Just opportunistic shorters pushing the stock down for the past 2 days. It is not like the Lehman days. The stock and other banks r undervalued now unlike tech stocks. If u r buying for the next 1 to2 mths, this stock will go past 50 bucks easily. The negative news is already priced in by now.
I wish I bought more when it was $44.
Citi has been in a mess since John Reed (share price $116) who was ousted following ill-advised merger with Saloman Smith Barney ... which took shares down to $1 ... at present value this stock is $4.80.
About time so called high flying CEOs and their Board members were made to pay for their deeds ...
C will be forced to cut its dividend. The stock is showing showing the signs.
buying more. This is old news and shorts will cover in 2 + days. Clockwork.
The issue for Citi in new CEO appointment is that Jane Frazer is a veteran insider being with the bank for many years. As a member of an old management team It is unlikely that she will run the bank with new vision, strategy or fresh and proactive growth focus. The top leadership gender has nothing to do with it. I think Citi has missed an opportunity to bring in an outsider with better record in banking. As I said I would prefer Gary Cohn or Charles Scharf. The fact that she worked for Goldman is a positive. Nevertheless, in my opinion an outsider would have been a better option for the bank.
Great day, easy money. Tomorrow $47 to $48
I'm a buyer under $40
This is a rare opportunity. Time to buy while it's at a bargain price. Not to sell when it's low.
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