Skip to main content

NEW YORK (TheStreet) -- Shares of Citigroup (C) - Get Free Report are flat at $54.40 in pre-market trade after it was reported that the company will announce the sale of its long-standing retail business in Japan to Sumitomo MitsuiBanking Corp. as it moves ahead with efforts to cut back on its less profitable consumer businesses worldwide, the Wall Street Journal reports..

Citigroup and the Japanese bank will announce Thursday a deal worth around 40 billion yen ($331 million), sources told the Journal.

Sumitomo Mitsui will take over Citi's retail deposits, customers and employees, the sources said. The Tokyo lender is the core banking unit of Sumitomo Mitsui Financial Group (SMFG) - Get Free Report .

Exclusive Report:Jim Cramer's Best Stocks for 2015

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Citi started approaching potential buyers in August, sources added, as it slims down its local operations by pulling out of more than 10 countries.

TheStreet Ratings team rates CITIGROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CITIGROUP INC (C) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 35.43% is the gross profit margin for CITIGROUP INC which we consider to be strong. Regardless of C's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, C's net profit margin of 12.38% is significantly lower than the industry average.
  • CITIGROUP INC's earnings per share declined by 10.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CITIGROUP INC increased its bottom line by earning $4.25 versus $2.46 in the prior year. For the next year, the market is expecting a contraction of 46.9% in earnings ($2.26 versus $4.25).
  • Net operating cash flow has significantly decreased to $6,287.00 million or 55.87% when compared to the same quarter last year. Despite a decrease in cash flow CITIGROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -66.63%.
  • You can view the full analysis from the report here: C Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.