Citigroup Slowing Rebuilding Credibility In Its Self-Improvement Story

Being bullish on Citigroup (C) has never been a particularly popular call for me, but the shares are up 16% since my last piece, the best among the U.S. mega-banks I follow, and up about 42% over the last year – better than JPMorgan (JPM), Bank of America (BAC), PNC (PNC), U.S. Bancorp (USB), and Wells Fargo (WFC). Yes, Citi-haters, I know the three-year comps and beyond are not nearly so favorable, but I think Citi’s results have supported the idea that there’s a credible plan in place here and the performance gap is closing (even if slowly…).

My bullish call on Citi has never been predicated on the belief that it is the best-run bank in the U.S., nor the one with the best prospects. Rather, my thesis was and is that the valuation doesn’t adequately or accurately reflect the growth potential of the business. Provided a long-term core growth rate of around 2% is still valid, these shares are undervalued below $90.

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Citigroup Slowing Rebuilding Credibility In Its Self-Improvement Story