Citigroup (C) Q4 Earnings - Is This The Best Bank Stock To Buy Now?

TL;DR

Citigroup's Q4 earnings show revenue growth of 6%, but concerns arise due to increasing credit losses and decline in mortgage originations.

Transcript

what is going on investors hopefully guys are doing well out there we've got a three day weekend so I wanted to catch up on some of the bank stocks that we did not cover that reported earnings on Friday one of those is actually a Citigroup now over the last year stocks down like a lot of Bank stocks down about 26 but over the last six months these ... Read More

Key Insights

• 🛀 Citigroup's earnings report shows revenue growth of 6% but highlights concerns about increasing credit losses and declining mortgage originations.
• 🏦 The bank's undervaluation compared to peers is influenced by limited revenue growth and negative EPS growth.
• 🥳 Citigroup's CEO aims to achieve a tier one capital ratio of 13, which could lead to stock buybacks and address undervaluation concerns.
• ☠️ The impact of the Federal Reserve's interest rate movement is seen as more important than the actual actions taken by the Fed.
• 💹 Citigroup's stock chart indicates a potential buying opportunity, with the stock price at the bottom of the channel.
• 🧑‍⚕️ The company's decision to divest from certain consumer banking businesses may impact its financial health in the short term.
• 😮 Increasing credit losses pose a concern, as delinquency and charge-off rates rise.

Questions & Answers

Q: What impact has the Federal Reserve's interest rate movement had on Citigroup's earnings?

The video suggests that the impact of the Federal Reserve's interest rate movement is significant and more important than the Fed's actual actions. The declining revenue growth and negative EPS growth for Citigroup could be attributed to these interest rate changes.

Q: Why is Citigroup trading at a fraction of its book value compared to its peers?

Citigroup's valuation is lower than its peers due to its limited revenue growth and negative EPS growth. Additionally, the company's decision to divest from certain consumer banking businesses impacts its tangible book value.

Q: What are the concerns regarding increasing credit losses for Citigroup?

Citigroup is experiencing a significant increase in credit losses, with delinquency and charge-off rates trending up. While the company has set aside more money to address this issue, prolonged growth in credit losses could require additional capital allocation.

Q: How is Citigroup's stock performing, and what are the technical insights?

The stock chart shows that Citigroup has been in an uptrend for the past decade, with a series of higher lows and higher highs. The current stock price is at the bottom of the channel, suggesting a potential buying opportunity for investors.

Summary & Key Takeaways

• Citigroup's Q4 earnings reported $18 billion in revenue, beating expectations but missing on non-gap BPS.

• The bank is experiencing limited revenue growth and negative EPS growth, leading to undervaluation compared to peers like JP Morgan and Bank of America.

• Citigroup's CEO targets a tier one capital ratio of 13, which will allow for stock buybacks and potentially address the undervaluation issue.