NEW YORK (TheStreet) -- Shares of Citigroup Inc (C) were sliding, down 1.38% to $56.60 in early market trading Wednesday, after analysts at Deutsche Bank downgraded the company to "hold" from "buy" this morning, following its strong share performance.
Deutsche Bank analysts set a $56 price target on Citi, and cited a valuation call for the rating cut.
The firm noted that Citigroup stock has risen about 21% since January.
Analysts see less near term upside with fixed income trading entering a weak period.
Deutsche also downgraded shares of Goldman Sachs (GS) this morning for the same reasons.
New York City-based Citigroup is a financial services holding company engaged in providing financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.
Separately, 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 some important positives, 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, expanding profit margins, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 21.0% when compared to the same quarter one year prior, going from $3,943.00 million to $4,770.00 million.
- 41.91% is the gross profit margin for CITIGROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.95% trails the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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 23.8% 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 $2.19 versus $4.25 in the prior year. This year, the market expects an improvement in earnings ($5.48 versus $2.19).
- C, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: C Ratings Report