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July�14,�2021

Citigroup�(C)
Price Yield Market Cap. 52-Week Range
Rating: Hold $68.37 3.0% $143.5B $80.29 – $40.49
Data as of 07/13/2021

Sector Financial Services Investment�Summary


Subsector Banks We�rate�CitiGroup�("Citi")�shares�a�Hold.�Valuation�for�Citi�shares�is�below�the�valuations
Investment Category Growth & Income for�Citi's�large�North�American�banking�peers.�However,�there�is�uncertainty�related�to�a
negative�regulatory�development�as�well�as�a�potential�change�in�strategy�championed�by
Price Movement Above Average
the�company's�new�chief�executive�officer.�Given�the�heightened�uncertainty,�as�well�as�our
Company Overview outlook�for�profitability�to�continue�to�trail�peers,�we�believe�Citi�shares�are�fairly�valued.

CitiGroup is a global bank founded in 1858 and


headquartered in New York City. Citigroup operates Outlook Key�Developments
in several financial services businesses, including
retail banking, credit cards, investment banking, Large�Consumer�and�Institutional 07/14/2021.�CitiGroup�("Citi")�reported
securities sales and trading, and trade finance. Franchises�-�The�global�consumer second-quarter�earnings�above�expectations.
CitiGroup does business in more than 160 countries bank�consists�of�retail�banking�and Relative�to�our�forecast,�earnings�upside�was
and jurisdictions. credit�card�lending,�while�the�institutional attributable�to�a�reduction�in�loan-loss�reserves
Revenues International 53% clients�business�provides�services�that and�a�favorable�tax�adjustment�related�to
Standard & Poor's/Moody's BBB+/A3 include�fixed�income�and�equity�trading, assets�in�the�United�Kingdom.�Revenues�were
investment�banking,�trade�finance,�and�cash in�line�with�expectations,�as�modest�sequential-
Dividend Outlook (1-Year): Rising management.�In�2020,�40%�of�revenues period�loan�growth,�improved�lending�margins,
Annualized Payment $2.04 were�generated�within�the�global�consumer and�investment-banking�advisory�fees�offset
Last Change 13% (Jun 27, 2019) bank�and�60%�within�the�institutional-clients softness�in�stock�underwriting�and�securities
Consec. Yrs Increased 0
business. trading.�While�almost�2%�higher�than�three
months�ago,�outstanding�loans�are�lower�than
Paid Since 2011 Operational�Error�Draws�Regulatory a�year�ago.�Citi's�reliance�on�credit�card�lending
5-Yr. Trailing Growth 59% Scrutiny�-�Following�a�major�administrative has�been�a�headwind�as�consumers�have
Long-Term Growth Est. 8% error,�Citi�paid�a�large�penalty�and�entered reduced�their�borrowing.
Payout Ratio ('22) 25% into�an�agreement�with�regulators�to�address
Dividends Paid Feb, May, Aug, Nov risk-management�concerns.�Until�substantial Operating�expenses�increased�by�7%�year-
Commentary. Early during the pandemic, U.S. progress�has�been�made,�regulators�could over-year,�due�to�continued�investments�in
banking regulators imposed restrictions on implement�business�restrictions�or�require technology�and�other�operating�expenses.
dividend increases for large U.S. banks. While leadership�changes.�Given�the�scope�of Due�to�increased�regulatory�scrutiny,�Citi�has
these restrictions have been lifted, CitiGroup has this�problem,�we�do�not�anticipate�a�swift been�forced�to�make�continuing�investment
not yet increased their dividend. Over the long
term, however, we still expect dividend increases resolution. in�risk-management�systems�and�processes,
in line with our expectations for earnings growth. which�we�expect�to�continue�into�the�second
Profitability�Improvement�May�Be�Stalling half�of�2021.�Despite�reserve�releases,�which
Valuation & Earnings Out�-�Citi's�profitability�has�improved�in continued�this�quarter,�Citi�still�holds�a�$19
'20A '21E '22E recent�quarters�but�remains�below�that�of billion�reserve�for�loan�losses.�The�decision�to
Earnings Per Share 4.87 8.90 8.15
Citi's�large�North�American�banking�peers. reduce�reserves�was�supported�by�an�improved
Citi�is�now�facing�increased�regulatory economic�outlook�and�lower�net�charge-offs.
P/E 14.0x 7.7x 8.4x
costs,�which�we�believe�will�be�a�headwind Credit�losses�within�the�Latin�America�segment
PEGY 1.3x 0.7x 0.8x
throughout�2021. declined�but�continue�to�be�a�relatively�large
LT EPS Growth Est. 8%
Valuation�and�Recent�Performance�-�C contributor.
Est. Earnings Date October 14, 2021
shares�are�currently�valued�at�less�than�1.0 Capital�levels�improved�from�three�months
Annualized Total Returns 1yr 3yr 5yr times�tangible�book�value�(assets-liabilities- ago,�but�remain�below�those�of�other�large
Citigroup 36% 4% 12% goodwill),�in�line�with�historical�averages. North�American�banks.�During�the�period,
S&P Fin. Svcs. Index 59% 13% 17% C�shares�have�underperformed�financial Citi�returned�over�$4�billion�in�capital�to
S&P 500 Index 41% 18% 17% services�peers�over�all�three�measurement shareholders,�including�approximately�$3�billion
periods�due�to�relatively�high�exposure�to related�to�share�repurchases.�Following�the
Data as of 07/13/2021. Source: FactSet. unsecured�consumer�lending�and�emerging- release�of�results�from�the�Federal�Reserve
Indexes are unmanaged and cannot be invested in market�economies.
directly. Past performance is no guarantee of future annual�stress�tests,�Citi�signaled�an�intention
returns. Risks.�C�shares�could�outperform�if�the to�maintain�the�quarterly�dividend,�while�other
bank's�new�CEO�is�able�to�implement�major banks�announced�increases.
strategic�changes�that�drive�improved
profitability.�Downside�risks�include
deteriorating�credit�quality�and/or�punitive
regulatory�developments.

Analyst: James Shanahan, CFA

Please see important disclosures and analyst certification on page 2 of the report.
Page 1 of 2 edwardjones.com
July 14, 2021 (NYSE: C)

Analyst�Certification
I�certify�that�the�views�expressed�in�this�research�report�accurately�reflect�my�personal�views�about�the�subject�securities�and�issuers;�and�no
part�of�my�compensation�was,�is,�or�will�be�directly�or�indirectly�related�to�the�specific�recommendations�or�views�contained�in�the�research
report.�James�Shanahan,�CFA
Required�Research�Disclosures
3-Year�Rating�and�Price�History�for:�Citigroup�(C)�as�of�07/13/2021 July�14,�2021 BUY HOLD SELL
H:$71.58 Stocks 55% 44% 1%
$90
03/29/2021
Investment�Banking 4% 3% 0%
$80
Services
$70
The�table�lists�the�percent�of�stocks�we�follow
$60

$50
globally�in�each�of�our�rating�categories.�Investment
$40 banking�services�indicate�the�percentage�of�those
$30 companies�that�have�been�investment�banking
Oct�2018 Jan�2019 Apr�2019 Jul�2019 Oct�2019 Jan�2020 Apr�2020 Jul�2020 Oct�2020 Jan�2021 Apr�2021 Jul�2021
clients�within�the�past�12�months.
Source:�Reuters

• Initiated�Coverage�PRE-1993.....(H)�01/20/09-09/27/10...(B)�09/27/10-03/29/21...(H)�03/29/21-
• Edward�Jones�has�received�compensation�from�this�company�for�investment�banking�services�within�the�last�twelve�months.
• Edward�Jones�has�provided�investment�banking�services�for�this�company�within�the�past�twelve�months.
• This�company,�or�an�affiliate,�is�a�Program�Bank�in�the�Edward�Jones�Insured�Bank�Deposit�Program.�Edward�Jones�transfers�available�cash
balances�in�client�accounts�into�FDIC�insured�deposit�accounts�at�Program�Banks.�Edward�Jones�receives�a�fee�from�each�Program�Bank
based�upon�total�balances�on�deposit.
• Analysts�receive�compensation�that�is�derived�from�revenues�of�Edward�Jones�as�a�whole�which�include,�but�are�not�limited�to,�investment
banking�revenue.

Opinion Rating Definitions: Buy (B) - We believe the valuation is attractive and total return potential is above average over the next 3-5
years compared with industry peers. Hold (H) - We believe the stock is fairly valued and total return potential is about average over the next
3-5 years compared with industry peers or a special situation exists, such as a merger, that warrants no action. Sell (S) - We believe the stock
is overvalued and total return potential is below average over the next 3-5 years compared with industry peers. In some cases we expect
fundamentals to deteriorate considerably and/or a recovery is highly uncertain. FYI (FI) - For informational purposes only; factual, no opinion.
Under Review (UR) – Our rating, estimates, and opinion for this company are under review and should not be relied upon for making investment
decisions until updated.
Other�Disclosures
• Information�about�research�distribution�is�available�through�the�Investments�and�Services�link�on�www.edwardjones.com
• For�U.S.�clients�only:�Member�SIPC�---�For�Canadian�clients�only:�Member�-�Canadian�Investor�Protection�Fund
• In�general,�Edward�Jones�analysts�do�not�view�the�material�operations�of�the�issuer.
• Shareholders�of�issuers�domiciled�outside�the�shareholders'�country�of�residence�are�generally�subject�to�a�withholding�tax�on�dividends�paid�by�that�issuer.�Subject�to�certain
conditions�and�limitations,�these�shareholders�may�be�entitled�to�a�partial�refund�of�the�withholding�tax�or�the�withholding�taxes�may�be�treated�as�a�foreign�tax�eligible�for�a�deduction
or�credit�against�the�shareholders'�tax�liability.�Shareholders�should�consult�their�tax�advisors�regarding�ownership�of�such�shares�and�the�procedures�for�claiming�a�deduction,�tax
credit�or�withholding�tax�refund.�When�investing�in�issuers�incorporated�outside�your�country�of�residence,�you�should�consider�all�other�material�risks�such�as�currency�risk,�political
risk,�liquidity�risk�and�accounting�rules�differences,�which�can�adversely�affect�the�value�of�your�investment.�Please�consult�your�financial�advisor�for�more�information.
• All�the�proper�permissions�were�sought�and�granted�in�order�to�use�any�and�all�copyrighted�materials/sources�referenced�in�this�document.
• Dividend�Outlook�(1-Year):�Rising�–�We�believe�the�dividend�is�likely�to�increase�based�on�historical�trends,�the�current�payout�ratio,�and/or�expected�future�earnings�and�cash�flow;
Stable�–�We�believe�the�dividend�is�stable�at�the�current�level�and�is�unlikely�to�increase�or�decrease;�At�Risk�–�We�believe�the�dividend�is�at�risk�of�being�reduced�or�eliminated;�No
Dividend�–�This�company�does�not�pay�a�dividend.
• This�report�does�not�take�into�account�your�particular�investment�profile�and�is�not�intended�as�an�express�recommendation�to�purchase,�hold�or�sell�particular�securities,�financial
instruments�or�strategies.�You�should�contact�your�Edward�Jones�Financial�Advisor�before�acting�upon�this�report.
• Investment�Category:�Growth�&�Income�-�Large-cap�companies,�as�well�as�REITs�and�utilities;�Growth�–�Small-�and�mid-cap�companies,�excluding�REITs�and�utilities;�Aggressive-
Micro-cap�companies,�companies�with�share�prices�below�$4,�stocks�restricted�by�Research,�and�emerging-market�stocks.
• Price�Movement:�Above�Average�-�This�stock�will�likely�move�up�and�down�to�a�greater�degree�than�the�average�stock�in�the�S&P�500�Index.�These�companies�are�often�growing
faster�than�the�average�company�and/or�are�in�industries�that�are�more�sensitive�to�the�economy;�Average�-�This�stock�will�likely�move�up�and�down�to�a�similar�degree�as�the�average
stock�in�the�S&P�500�Index;�Below�Average�-�This�stock�will�likely�move�up�and�down�to�a�lesser�degree�than�the�average�stock�in�the�S&P�500�Index.�These�companies�are�often
more�mature,�growing�slower�than�the�average�company,�and/or�are�in�industries�that�are�more�defensive�in�nature�and�less�sensitive�to�the�economy.
• This�report�is�a�product�of�the�Edward�Jones�Security�Research�Department.
• Dividends�can�be�increased,�decreased�or�eliminated�at�any�point�without�notice.
• Diversification�does�not�guarantee�a�profit�or�protect�against�loss�in�declining�markets.
• This�opinion�is�based�on�information�believed�reliable�but�not�guaranteed.�The�foregoing�is�for�INFORMATION�ONLY.�Additional�information�is�available�on�request.�Past�performance
is�no�guarantee�of�future�results.
• Our�expectation�for�average�annual�earnings�growth�through�a�full�economic�cycle.�This�figure�avoids�distortions�that�can�occur�due�to�one-time�items�or�by�extreme�peaks�or�troughs
within�the�cycle.
• The�S&P�500�Index�is�based�on�the�average�performance�of�500�widely�held�common�stocks.�The�S&P�500�Sector�Indexes�are�subsets�of�the�S&P�500�Index.�These�are�unmanaged
indexes�and�cannot�be�invested�in�directly.�Past�performance�is�no�guarantee�of�future�results.
• Ratings�from�Standard�&�Poor's�("S&P"),�Moody's�and�Fitch�may�be�shown�for�certain�securities.�S&P�requires�we�inform�you:�(1)�Ratings�are�NOT�recommendations�to�buy,�hold,�sell
or�make�any�investment�decisions�and�DO�NOT�address�suitability�or�future�performance;�(2)�S&P�DOES�NOT�guarantee�the�accuracy,�completeness,�or�availability�of�any�ratings
and�is�NOT�responsible�for�results�obtained�from�the�use�of�any�ratings.�Certain�disclaimers�related�to�its�ratings�are�more�specifically�stated�at�http://www.standardandpoors.com/
disclaimers.

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