Citigroup, Inc.

Citigroup Details

Citigroup Inc (NYSE: C) is the leading global bank with around 200 million customer accounts. It provides various financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Result Performance for the Year Ended 31 December 2021 – (FY21)

• The net income stood at $22.0 billion in FY21, up 99% YoY on revenues of $71.9 billion in FY21, down 5% YoY.
• Commissions and fees stood at $13.67 billion in FY21, up 20% YoY and Administrative & other fiduciary fees stood at $3.9 billion in FY21, up 14%
• Revenue by region: North America (down 7%), Latin America (down 3%), Asia (down 9%), and EMEA (below 1%)
• The net income for Q4FY21 stood at $3.2 billion on revenues of $17.0 billion.
• Revenues increased 1% in Q4FY21, primarily driven by strong growth in Investment Banking and Corporate/Other, partially offset by lower revenues across regions in Global Consumer Banking (GCB).

Source: Company Reports, Analysis by Kalkine Group

Recent Update

On 18 January 2022, Citi and Bloomberg advised the market on integrating Bloomberg’s BSKT service with Citi’s proprietary ACES platform to better support Citi’s ETF customers who use BSKT to negotiate fixed income baskets.

Outlook

It is advancing with urgency on its top priorities, including the Transformation, refreshing its strategy, and building a culture of excellence to effectively narrow the returns gap among its peers. It is strengthening its risk and control environment to attain operational excellence. Further, the company’s key priorities include increasing returns for shareholders and boosting capital return over time. The company remains committed to returning surplus capital over and above the required amount towards investment in its franchise and sustaining its safety and soundness.

Key Risks

The group is exposed to the risk of uncertainties associated with the COVID-19 pandemic that would adversely affect its businesses, results, and financial condition. Further, it is susceptible to the risk of changes in regulation and legislative uncertainties in the U.S. and globally. Moreover, it operates in a highly competitive environment, and the evolution of emerging technologies could fast-track disruption in the financial services industry.

Valuation Methodology: Price/BVPS Based Relative Valuation (Illustrative)

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Stock Information                                           

The company has delivered a 6-month and one-year return of ~-7.48% and ~+2.23%, respectively. The stock is trading lower than the average of the 52-week high price of $80.29 and the 52-week low price of $57.40.

The stock has been valued using a Price/BVPS multiple-based illustrative relative valuation, and the target price so arrived reflects a rise of low double-digit (in % terms). A slight premium has been applied to Price/BVPS Multiple (NTM) (Peer Average), considering its substantial capital and liquidity positions and significant growth in net income in FY21.

Considering the aforementioned factors along with strategic investments towards growth, a “Buy” recommendation has been assigned on the stock at the current market price of $61.70 per share as of 24^th January 2022 (Time: 9:56 AM, NY, USA).

Citigroup, Inc. (C) is a part of Kalkine’s Global Big Money Product

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.