Citigroup Inc Stock Hold Recommendation Reiterated (C)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Citigroup (NYSE:C) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.

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Highlights from the ratings report include:

• CITIGROUP INC's earnings per share declined by 11.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CITIGROUP INC increased its bottom line by earning $3.61 versus $3.50 in the prior year. This year, the market expects an improvement in earnings ($4.12 versus $3.61).
• Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• The debt-to-equity ratio is very high at 3.44 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
• The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Financial Services industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $3,341.00 million to $2,946.00 million.

Citigroup, Inc., a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings. The company has a P/E ratio of 8.6, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Citigroup has a market cap of $87.12 billion and is part of the financial sector and banking industry. Shares are up 12.9% year to date as of the close of trading on Friday.

You can view the full Citigroup Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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