NEW YORK (TheStreet) - Citigroup (C) beat analysts' estimates on earnings per share by 16 cents earning $1.24. This report was released before the opening bell on Monday and this followed the company's announcement that they settled their subprime mortgage probe paying $7 billion.
Citi shares are currently trading around $48.45, down over 7% for the year to date.
When I crunched the numbers for the 24 components on the KBW Banking Index on July 7 I noted that Citigroup has a year-to-date decline of 7.4% since its July 3 close at $48.24.
Let's look at the daily chart for Citigroup:
Courtesy of MetaStock Xenith
Citigroup traded as high as $48.83 on Monday morning hopping above its 21-day and 50-day simple moving averages at $47.61 and $47.57, respectively, but stayed shy of its 200-week SMA at $49.24.
I am not showing Citi's weekly chart, but the stock will have a positive weekly chart given a close this week above its five-week modified moving average at $47.73 with its 200-week SMA at $40.91.
Last Thursday and Friday Citigroup held its semiannual value level shown in the second table of my July 7 profile giving investors the opportunity to buy this stock pre-earnings. Semiannual and monthly risky levels are $48.92 and $49.63, respectively.
On Friday Wells Fargo (WFC) ($51.21) matched analysts earnings per share estimates and the stock traded down to $50.82 holding my semiannual value level at $50.95 then rebounded to $51.84 Monday morning above its 50-day SMA at $51.13 but below its 21-day SMA at $52.25.
The weekly chart shifts to neutral from positive but overbought with a close this week below its five-week MMA at $51.51. A lower semiannual value level is $43.27 with a semiannual pivot at $50.95 and quarterly and monthly risky levels at $53.09 and $54.55, respectively.
Let's look at the weekly chart for the banking index:
Courtesy of MetaStock Xenith
Wells Fargo has outperformed all 24 components of the components of the BKX up 17% year-to-date as of July 3 and above all of its highs set in 2007 and 2008, while the BKX struggles with its 50% Fibonacci retracement at $69.37. The 50-day MMA for the BKX is a key support at 70.78 with its 200-week SMA at $53.62.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
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 multiple strengths, 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 increase in net income, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 3.5% when compared to the same quarter one year prior, going from $3,808.00 million to $3,943.00 million.
- CITIGROUP INC reported flat earnings per share in the most recent quarter. 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 increased its bottom line by earning $4.25 versus $2.46 in the prior year. This year, the market expects an improvement in earnings ($4.54 versus $4.25).
- 38.78% is the gross profit margin for CITIGROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, C's net profit margin of 16.62% significantly trails the industry average.
- C, with its decline in revenue, slightly underperformed the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: C Ratings Report