Citigroup, Inc. (
) shares are trading higher ahead of the company's fourth quarter
2010 earnings release, expected out before the market opens on
Tuesday, January 18, which will be the next trading day due to the
MLK holiday on Monday. Shares are up1.9% this afternoon.
Citi is expected to report EPS of $0.08 on revs of $20.50 billion.
Last quarter, the New York, NY-based financial institution reported
EPS of $0.08 with revs of $20.74 billion, mixed to the consensus
estimates. For Q409, Citi procured a loss per share of $0.06,
ex-items, with revs of $11.7 billion.
Shares gained 15.6% through the quarter, to $4.73 at the end of
December. The stock is up about 7% since the end of the quarter,
and shares ended up 39% better in 2010.
A simple valuation puts the company with a forward P/E of 11x FY11
EPS estimates, compared to 10.1x for Bank of America (
), 11.5x for Wells Fargo (
), and 9.7x for J.P. Morgan (
Data from Bloomberg has 16 analysts with a Buy on C, 9 with a hold,
and three suggesting to Sell. The analyst price target average is
$5.50, with a high of $6.96 and low of $4.
A little pressure may be alleviated on the financial sector, which
is typically the first major sector to report earnings amid the
wave to come, as J.P. Morgan amassed a solid fourth quarter report.
This will be the Citigroup's first quarterly report as a government
free company since the bailout, after the Treasury finished up
selling their shares in December.
Keefe, Bruyette & Woods thinks that, despite strong revs out of
corporate finance, they see continued sluggish trading volumes and
widening credit spreads at international counterparties. KBW is
looking for an EPS of $0.08. They have a Market Perform on the
stock, which they've kept on since Citi was trading for $37. Price
target is $5.00.
J.P. Morgan sees pressure in EMEA stemming from "risk aversion in
fixed income markets with the sovereign crisis and low rates."
Additionally, "Good growth in emerging markets where Citi has
broader franchises is likely to be offset partly by slower growth
in developed markets. Investment banking is recovering from
large-scale departures. Credit quality is improving, leading to
reserve releases. Longer term, Citi needs to re-evaluate its
strategy for consumer banking in developed markets in Western
Europe given its position as a leading global bank. Citi also has
to evaluate its stake in Akbank due to Basel 3. EMEA is the third
among four regions for Citi in terms of revenues and net income and
its share of net income could diminish with stronger growth in Asia
and Latin America and further decline in credit costs in North
JPM currently is looking for EPS of $0.07. They have an Overweight
rating on the stock, with a $6.00 price target.
Bloombnerg notes, with a smiling photo accompaniment, that Vikram
Pandit will be able to report the first profit for his company
since he took the helm three years ago. In his first tow years as
CEO, Pandit saw Citi bleed $29.3 billion.
Shareholders will be looking for some clarity on future earnings
power, with current estimates varying widely. Some see earnings
power up to $1 per share over the next few years, while others
don't see the company earning more than $0.50 per share.
There has also been some
that a reverse stocks split could be announced with the earnings
Citigroup, Inc. is expected to release their Q410 earnings on
Tuesday, January 18, 2011, at approximately 8:00am EST. Stay tuned
section to see our analysis of the highly-anticipated quarterly
results withi0 n seconds of their release.