This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Analysts Raise Targets, Estimates For Citigroup

Stocks in this article: C

NEW YORK ( TheStreet) -- Analysts raised estimates and price targets for Citigroup (C), 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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs