Citigroup Bloodbath: $1 Billion Charge, 11,000 Jobs Cut and 84 Branches Gone (Update 3)

Citigroup is currently paying a nominal quarterly dividend of a penny a share, and the company has not repurchased any shares this year.

After the Federal Reserve announced its methodology for the next round of bank stress tests, Barclays analyst Jason Goldberg on Nov. 12 said he expects Citigroup to raise its quarterly dividend to four cents a share following the stress tests, while gaining Fed approval to repurchase $2 billion worth of common shares, or 1.7% of shares outstanding, through the first quarter of 2014.

Evercore Partners analyst Andrew Marquardt wrote in a report on Wednesday that the company's "repositioning actions equate to net $0.18/shr annually," or 3% of his "norm" annual earnings estimate of $5.50 a share.

Marquardt called Citigroup's expense cuts "a good early step" by Corbat, and said his firm expected "more announcements (likely next year) regarding add'l repositioning which we suspect may focus on refining the strategic direction of the franchise." The analyst rates Citi "Equal-Weight," with a price target of $36.00.

Credit Agricole analyst Mike Mayo -- a sharp critic of Citigroup over the past several years -- said in a report after Citi's announcement that "the new CEO took a serious playbook off the shelf and started with moves in his old region of EMEA (three of five exit countries)."

Mayo said that "the moves today create a tone that the new CEO will not take half measures," but that his firm was viewing Citigroup's expense cuts "as an initial 'tremor' and that an 'earthquake' or more radical restructuring is needed before the April 16th annual meeting to satisfy activists."

The analyst rates Citigroup "Outperform," with a 12-month price target of $43.00.

Citigroup's shares have now returned 39% year-to-date, following a 44% decline during 2011.

The shares trade for 0.7 times their reported Sept. 30 tangible book value of $52.70, and for eight times the consensus 2013 EPS estimate of $4.64, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $5.03.

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Citigroup's shares were up over 3% in premarket trading, to $35.40.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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