Shares of Citigroup (C) gained in trading on Wednesday after the bank’s Q4 results topped estimates. The bank swung to a profit in the fourth quarter with earnings of $1.34 per share, compared to a loss of $1.16 in the same period a year back. This was above Street estimates of $1.22 per share.
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Citi’s Q4 Revenue Growth Driven by Investment Banking Revenues
Furthermore, Citi’s revenues increased by 12% year-over-year to $19.6 billion in the fourth quarter. This surpassed consensus estimates of $19.5 billion. The fourth quarter brought notable growth in revenues across various business units, with investment banking standing out as a key driver. Revenue from this segment soared 35% year-over-year to $925 million, buoyed by strong momentum in the issuance of investment-grade corporate debt.
Citi’s CEO Comments on the Results
Citi’s CEO Jane Fraser commented on the strong Q4 results, “2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7 billion and we exceeded our full-year revenue target, including record years in Services, Wealth and U.S. Personal Banking.”
Citi Declares Dividend and Stock Buybacks
In addition, Citigroup declared a quarterly dividend on its common stock of $0.56 per share, payable on February 28 to stockholders of record on February 3, 2025. Furthermore, the bank announced a new, multi-year $20 billion stock buyback program beginning in the first quarter of 2025.
Citigroup Issues FY25 Outlook
Looking ahead, in FY25, the bank expects its FY25 revenues to be in the range of $83.5 to $84.5 billion with net interest income (excluding fixed income and equity markets) to be up modestly year-over-year. Additionally, Citigroup has projected its return on tangible common equity (RoTCE) to reach 10% to 11% in 2026, even as this falls short of its medium-term target of 11% to 12%.
The bank’s CEO Jane Fraser assured investors, “This level is a waypoint, not a destination. We intend to improve returns well above that level and deliver Citi’s full potential for our shareholders.”
Is Citigroup a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about Citi stock, with a Moderate Buy consensus rating based on 12 Buys and five Holds. Over the past year, Citi has increased by more than 40%, and the average Citi price target of $82.78 implies an upside potential of 12.6% from current levels. These analyst ratings are likely to change following Citigroup’s results today.
