Citigroup (C) has reported its Q2 earnings, showing a notable performance that has left investors contemplating whether to buy, sell, or hold their shares. Despite beating expectations, the stock saw a slight dip in early trading.
Key Takeaways
- Revenue Growth: Citigroup’s revenue increased by 3.6% year-over-year to $20.1 billion, driven by growth across all business sectors.
- Earnings Per Share (EPS): EPS rose by 14.3% to $1.52, surpassing analysts’ expectations.
- Dividend Increase: The company will increase its dividend by 6% in the third quarter.
- Share Repurchase: Citigroup plans to repurchase $1 billion of shares in the current quarter.
- Analyst Recommendations: The consensus recommendation for Citigroup stock is a Buy, with an average target price of $69.69.
Revenue and Earnings Performance
In the quarter ended June 30, Citigroup reported a revenue increase of 3.6% year-over-year, reaching $20.1 billion. This growth was attributed to strong performances in Banking, U.S. Personal Banking, and Markets. The earnings per share (EPS) also saw a significant rise of 14.3%, reaching $1.52, which exceeded Wall Street’s expectations of $1.39 per share.
Citigroup CEO Jane Fraser highlighted the company’s progress in executing its strategy and the benefits of its diversified business model. "Our results show the progress we are making in executing our strategy and the benefit of our diversified business model," Fraser said.
Dividend and Share Repurchase
Citigroup reiterated its plan to increase its dividend by 6% in the third quarter, a move first announced on June 28 following the Federal Reserve stress test process. "The recent stress tests again showcased the strength of our balance sheet," Fraser noted. The company’s CET1 ratio now stands at 13.6%.
Additionally, Citigroup plans to repurchase $1 billion of shares in the current quarter. This follows the repurchase of $500 million in the first quarter and none in the second quarter.
Comparison with Competitors
On the same day, JP Morgan Chase (JPM) and Wells Fargo (WFC) also reported their earnings. JP Morgan reported revenue of $51 billion and earnings of $4.40 per share, both surpassing expectations. Wells Fargo also exceeded estimates with revenue of $20.7 billion and EPS of $1.33.
Analyst Recommendations
Wall Street remains bullish on Citigroup, with the average analyst target price set at $69.69, implying an upside of more than 9% from current levels. The consensus recommendation is a Buy, reflecting confidence in the company’s future performance.
Conclusion
Citigroup’s Q2 earnings report showcases a strong performance with significant revenue and EPS growth. The planned dividend increase and share repurchase further highlight the company’s robust financial health. With positive analyst recommendations, Citigroup stock appears to be a promising investment opportunity.
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