Rating Change #1
(C - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 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 19.3%. 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Diversified Financial Services industry and the overall market, CITIGROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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 $87.3 billion and is part of the
industry. Shares are up 18.3% year to date as of the close of trading on Friday.
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-- Reported by Kevin Baker in Palm Beach Gardens, Fla.
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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