Is Citigroup Stock Worth Buying as It Gains 13.2% in a Month?

Core Viewpoint - Citigroup is undergoing significant restructuring to enhance performance, reduce costs, and simplify operations, which is expected to support its financials in the upcoming period [1][25]. Business Restructuring Efforts - CEO Jane Fraser is leading a comprehensive overhaul, including an organizational restructure that introduces five new reportable operating segments and reduces management layers [2][7]. - The company plans to eliminate 20,000 jobs over the next two years, following a reduction of approximately 10,000 jobs last year [2][3]. Financial Performance and Outlook - Total reported expenses for 2024 are expected to decline by more than 4% year-over-year to $54 billion, with management anticipating slightly lower expenses in 2025 [3][10]. - Citigroup's net interest income (NII) (excluding Markets) declined by 1$47.1 billion in 2024, but is expected to see modest growth in 2025 and continued momentum in 2026 [15][18]. Focus on Core Operations - The company is divesting non-core units, having exited consumer banking in nine countries and completed the separation of its institutional banking business in Mexico [7][9]. - Citigroup aims to modernize operations and invest in high-returning businesses like investment banking and wealth management, expecting a compounded annual growth rate (CAGR) of 4-5% in revenues by the end of 2026 [10][9]. Digital Initiatives - Citigroup is accelerating its digital strategy, rolling out AI tools for 140,000 employees across eight countries and making investments to automate mortgage origination [18][19]. - Active digital users increased by 5% year-over-year, which is expected to enhance top-line growth and improve operating efficiency [20]. Valuation and Stock Performance - Citigroup's stock is trading at a forward 12-month price-to-earnings (P/E) multiple of 10.69X, below the industry average of 14.66X, and cheaper than peers Bank of America and Wells Fargo [21][22]. - The company has a share repurchase plan authorized for $20 billion, with$1.5 billion expected to be bought back in the first quarter of 2025 [31]. Dividend and Shareholder Returns - Citigroup increased its quarterly dividend by 6% to 56 cents per share in July 2024, maintaining a consistent dividend payout with a ratio of 38% [30]. - The company’s solid growth trajectory and restructuring efforts present a favorable investment opportunity at current price levels [32].