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The Trefis price estimate for Citigroup's stock is around $82.22 per share
Stock price estimate
Citigroup provides consumer banking, credit cards, investment banking, sales & trading, and treasury and securities services.Its end users include retail consumers, small businesses, corporates, governments, high net-worth Individuals, and Institutional Investors (like pension funds, mutual funds and hedge funds etc).Trefis has a price estimate of $82.22 for Citigroup's stock, 15% more than its current price of about $71.81 per share.
Citigroup Stock (NYSE:C)Citigroup Earnings: Preview and 2019 OutlookCitigroup Revenues: How Does Citigroup Makes Money? All Trefis Industrials Company data
#1 Estimating Citigroup's Total Revenues
#1.1 Forecasting Citigroup's Institutional Clients Group Revenues
We expect ICG's revenues to slightly decrease in 2019.Advisory & Underwriting revenues would see a marginal drop due to negative growth in equity underwriting. Further, Sales & Trading revenues are expected to decline by 3% y-o-y due to unfavorable market conditions. However, 3% growth in Treasury & Trade Solutions would offset the impact on ICG's top line.
Institutional Client Group (ICG) [A=B+C+D]
Revenue for Sales & Trading [D]
Treasury & Trade Solutions Revenue [B]
Revenue for Advisory & Underwriting Services [C]
#1.2 Forecasting Citigroup's Total Revenues
In 2019, we expect Total Revenues to be $73.9 billion,1% more than 2018.Global Consumer Banking (GCB) is expected to have a 5% growth in revenues driven by growth in Net Interest Income across both Consumer Banking and Citi Cards segments.However, 1% y-o-y decline in Institutional Client Group (ICG) revenues coupled with 12% drop in Corporate/other segment would partially offset the impact on top line.
Total Revenue [A=B+C+D]
Institutional Client Group [B]
Global Consumer Banking [C]
Revenue for Corporate/Other [D]
Note: Please visit our interactive dashboard for detailed analysis of Citigroup’s Revenues.
#2 Deriving Citigroup's Net Income Figure
Note: The unusually low Net Income figure in 2017 was due to a one-time increase in taxes from the implementation of the U.S. Tax Act.
Growth in revenues would more than offset the increase in expenses, which would lead to an improvement of 2% y-o-y in the EBT figure.This coupled with lower expected tax rate in 2019 would enable Citigroup to post a better net income margin of 23.6%, up from 22.9% in 2018.Citigroup is expected to have a Net Income of $17.4 billion in 2019 which is 5% more than previous year.
Net Income available to common shareholders [A=B*C]
Total Revenue [A]
Net Income Margin [B]
#3 Deriving Citigroup's EPS Figure
GAAP Net Income
Average diluted common shares issued and outstanding [C]
Citigroup has regularly invested in share repurchase to boost shareholder returns. We expect it to repurchase $17 billion worth of shares and report an EPS figure of $7.74 in 2019.
#4 Estimating Citigroup's Share Price
Share Price [A=B*C]
Citigroup’s P/E multiple was 7.6x in 2018.
The bank has surpassed the consensus estimates for each of the last three quarters. Further, it is expecting slight growth in 2019 mainly driven by Global Consumer Banking segment. This should enable the P/E multiple to increase to 10.6x in 2019
We expect Citigroup to achieve earnings of $7.74, which coupled with our forward P/E multiple of 10.6x works out to a price estimate of $82.22.
Comparing Citigroup's P/E multiple with that of its Peers - Bank of America, JPMorgan and Goldman Sachs
Note: Citigroup's P/E figure in 2017 was zero due to negative EPS figure of -$2.76. This was caused by a one-time increase in taxes from the implementation of the U.S. Tax Act.
Citigroup’s expected P/E Multiple of 10.6x in 2019 is lower than Bank of America’s 12.9x and JPMorgan’s 12.3x, but more than Goldman Sachs’ expected P/E of 10.3x.The lower P/E multiple for Citigroup as compared to Bank of America and JPMorgan is in line with the P/E trend over the last four years, where market had attached a higher growth multiple to its peers.
DISAGREE WITH OUR FORECASTS? CREATE YOUR OWN
1. How to save your forecasts for Citigroup:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.