Citigroup’s Q2 Results Beat Expectations

Wall Street banking giant Citigroup (C) has delivered better-than-expected Q2 2021 results on significant decline in cost of credit, driven by improvements in portfolio quality and macroeconomic outlook.

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The company reported adjusted earnings of $2.85 per share for the quarter, much above the consensus estimate of $1.96 per share. Also, bottom line compares favorably with $0.38 per share in last year’s quarter.

Quarterly revenues of $17.5 billion surpassed the Street’s expectations of $17.2 billion but declined 11.6% from the prior-year quarter. Sharp fall in revenues from fixed income markets was partly offset by rise in equity markets and investment banking income. (See Citigroup stock chart on TipRanks)

Loans in the second quarter fell 1% (on reported basis), driven by declines across Global Consumer Banking and Institutional Clients Group on higher repayment rates.

Citigroup CEO Jane Fraser said, “We are making progress on our strategy refresh across our consumer and institutional businesses. Our overarching goal is to increase the returns we generate and close the gap with our peers.”

Following the results, Oppenheimer analyst Chris Kotowski assigned a Buy rating to the stock with a price target of $116 (upside potential of 70.2% from current levels).

The analyst said, “Loan volumes (and particularly card) appear to have hit their low point and are on the rise, and, while this was not yet enough to drive higher revenues… that should begin to materialize in late 2021/early 2022.”

The rest of the Street is optimistic about the stock with a Strong Buy consensus based on 10 Buys and 2 Holds. The average Citigroup price target of $89.63 implies 31.5% upside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Citigroup, with 10.3% of investors, who have their portfolio on TipRanks, increasing their exposure over the past 30 days.