Why Citigroup (C) Stock Is Up Today

NEW YORK (TheStreet) -- Citigroup (C) was gaining 1.1% to $51.81 Wednesday after announcing a plan to purchase two series of outstanding notes.

The bank announced it will start offers to purchase certain notes for cash. The notes Citigroup intends to buy back had an aggregate principal amount of about $3.77 billion as of Sept. 8, 2014.

Citigroup's offers cover about $1.25 billion of 5.5% notes due in 2017, and about $2.5 billion of notes due in 2018.

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The offers currently total up to about $410 million aggregate principal amount of the notes. The offers will expire on Oct. 6, 2014 at 11:59 p.m.

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 a number of 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 expanding profit margins and increase in stock price during the past year. 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:

  • 40.66% 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 0.78% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.9%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • CITIGROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 16.5% in earnings ($3.55 versus $4.25).
  • Net operating cash flow has significantly decreased to $2,012.00 million or 89.95% when compared to the same quarter last year. Despite a decrease in cash flow of 89.95%, CITIGROUP INC is in line with the industry average cash flow growth rate of -97.19%.
  • You can view the full analysis from the report here: C Ratings Report

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