Buffett Offloads Citigroup Shares: Should You Follow and & Sell C Stock?

Core Insights - Warren Buffett's Berkshire Hathaway fully sold over 14.6 million shares of Citigroup in Q1 2025 as part of a broader reduction in financial sector holdings [1][2] - Citigroup is undergoing significant restructuring, including a plan to eliminate 20,000 jobs over two years to streamline operations and reduce expenses [4][5] Financial Performance - Citigroup's net interest income (NII) for Q1 2025 was reported at $14 billion, a 4% increase year-over-year, benefiting from lower funding costs [11] - Management expects expenses to be below$ 53.4 billion in 2025, down from $53.9 billion in 2024 [6] Business Strategy - Citigroup is focusing on core operations by exiting consumer banking in 14 markets and has already completed exits in nine countries [7][8] - The company aims for a compounded annual revenue growth rate of 4-5% by the end of 2026 and anticipates annualized run rate savings of$ 2-2.5 billion by 2026 [10] Liquidity and Capital Position - As of March 31, 2025, Citigroup's cash and investments totaled $761 billion, with total debt at$ 317.4 billion [14] - The common equity tier 1 (CET1) capital ratio was 13.5%, indicating a strong capital base to support distribution activities [15] Valuation Metrics - Citigroup is trading at a forward 12-month price-to-earnings (P/E) ratio of 9.50X, below the industry average of 13.80X, suggesting it is undervalued [19][22] - The stock has gained 20% over the past month, outperforming the S&P 500's growth of 11.9% [17] Future Outlook - Citigroup's ongoing restructuring and focus on core operations provide a solid foundation for growth, with expectations for improved financial performance in the upcoming periods [23][29] - The Zacks consensus estimates project year-over-year growth in sales and earnings, indicating positive momentum for the company [24][28]