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. NEW YORK ( TheStreet) -- Citigroup (NYSE: C) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Diversified Financial Services industry average. The net income increased by 25.0% when compared to the same quarter one year prior, going from $957.00 million to $1,196.00 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- CITIGROUP INC has improved earnings per share by 35.5% 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 reported lower earnings of $2.49 versus $3.61 in the prior year. This year, the market expects an improvement in earnings ($4.68 versus $2.49).
- C, with its decline in revenue, slightly underperformed the industry average of 7.1%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet Ratings Staff