This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Analysts Raise Targets, Estimates For Citigroup

NEW YORK ( TheStreet) -- Analysts raised estimates and price targets for Citigroup (C - Get Report), after it reported stronger-than-expected second-quarter results on Monday.

The New York-based bank said second-quarter profit rose 25% year-over-year, excluding non-core items, driven by strong trading revenues, improving credit quality and shrinking losses at its non-core business.

The earnings beat came even as emerging markets showed signs of slowing down. Citigroup gets more than 60% of its revenues from outside the United States.

Shares of Citigroup rose 2% Monday following the earnings report and are now up more than 30% year-to-date. But analysts remain bullish on the stock and continue to cite its attractive valuation.

"Though the bar has been raised with the share price surge and elevated headline risk tied to slowing emerging markets, our sense is the positive catalysts will drive the shares higher given the steep discount," Sterne Agee analyst Todd Hagerman wrote in a report early Monday.

The analyst said Citigroup's stock could have meaningful upside given expectations for "positive leverage across the franchise in '13, diminishing earnings drag tied to Holdings, ongoing momentum in capital markets, nearly double-digit growth in tangible book value, and positive earning asset growth, including relative margin stability." Citi Holdings is the subsidiary into which Citigroup has placed non-core assets, allowing them to run-off or be sold.

Hagerman raised his 12-month price target of Citigroup to $61 from $56.00. He also increased his earnings estimate for 2013 by $5.10 a share from $4.85, and the 2014 EPS estimate to $5.65 from $5.55.

KBW analyst Fred Cannon also raised estimates for the bank and bumped up his price target to $58.00.

Cannon was impressed by Citi's progress in building capital during a quarter where "equity was weighed down by both a decline in AFS [available for sale] securities and the negative impact of foreign currency translations in a volatile FX market."

Citi finished the quarter with a Basel III Tier I Common Ratio of 10%, ahead of the minimum regulatory requirement of 9.5% it needs to meet by 2019. This sets the stage for "improved capital deployment in 2014," according to Cannon.

During the conference call, analysts raised concerns about the slowdown in emerging markets, particularly in China. Management acknowledged that growth was somewhat slower than they had initially expected, but maintained a positive outlook for emerging markets.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
C $44.62 -2.10%
AAPL $94.33 -0.89%
FB $117.90 0.40%
GOOG $697.06 0.68%
TSLA $223.95 -3.60%


Chart of I:DJI
DOW 17,659.62 -91.29 -0.51%
S&P 500 2,050.62 -12.75 -0.62%
NASDAQ 4,726.1570 -37.0670 -0.78%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs