Monday, April 16, 2018

Citigroup's Valuation Masks Some Incremental Progress And Improvement

Citigroup (C), has been a middle-of-the-road performer for the last year, with peers like U.S. Bancorp (USB), Wells Fargo (WFC), and Goldman Sachs (GS) underperforming and JPMorgan (JPM), PNC Financial (PNC), and Bank of America (BAC) outperforming, and so too over the last three months as the sector has sold off. Investors continue to remain skeptical about Citigroup’s ability to hit its long-term targets and reverse a long trend of lackluster, disappointing performance.

Citigroup has earned those doubts, but I continue to believe the market is overdoing it. Even low single-digit long-term growth would support a higher price, and that is despite some actual ongoing signs of improvement. While Citi is a long way away from being my favorite bank on a quality basis, I think the relative valuation is still quite interesting.

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Citigroup's Valuation Masks Some Incremental Progress And Improvement

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