Citigroup Hits a 52-Week High: Should Investors Bet on the Stock Now?

Core Insights - Citigroup, Inc. reached a 52-week high of $99.70, closing at $99.44, with a year-to-date share increase of 44.3%, outperforming the industry growth of 28.9% and peers like Bank of America and Wells Fargo [1][4][30] Price Performance - The recent share price strength is linked to expectations of a Fed rate cut, with 94.2% of market participants anticipating a 25-basis-point cut in the upcoming FOMC meeting [4] - Citigroup's net interest income (NII) rose 8% year-over-year in the first half of 2025, with a revised growth forecast of 4% for 2025, up from a previous estimate of 2-3% [5][6] Business Strategy - Citigroup is focusing on core operations by exiting consumer banking in 14 markets, having already exited nine, and is winding down operations in Korea and Russia [10][11] - The company is preparing for an IPO of its consumer banking and small business operations in Mexico, aiming to free up capital for investments in wealth management and investment banking [11] Revenue Growth - Wealth management revenues increased by 22% year-over-year, while investment banking revenues rose by 13% in the first half of 2025, with expectations for mid-single-digit percentage growth in IB fees and market revenues for Q3 2025 [12] Cost Management - Citigroup is implementing a streamlined operating model, planning to cut 20,000 jobs (8% of global staff) by 2026, with over 10,000 jobs already reduced [15] - Total expenses declined nearly 1% year-over-year in the first half of 2025, with a projected slight decline in expenses for 2025 [16] Liquidity and Capital Distribution - As of June 30, 2025, Citigroup's cash and investments totaled $474.4 billion, with total debt at $373.3 billion, indicating a strong liquidity position [17] - The company raised its dividend by 7.1% to 60 cents per share and has a dividend yield of 2.41%, above the industry average [19] - A $20 billion common stock repurchase program was approved, with $16.3 billion remaining as of June 30, 2025 [20] Valuation Analysis - The Zacks Consensus Estimate for Citigroup's sales indicates year-over-year growth of 4.5% for 2025 and 2.9% for 2026, with earnings expected to increase by 27.6% and 27.8% respectively [22] - Citigroup is trading at a forward P/E of 10.95X, below the industry average of 14.95X, indicating a valuation discount compared to peers [24][28] Investment Consideration - Citigroup's strong fundamentals, cost-cutting measures, and strategic focus position it for sustained growth, making it an attractive option for investors seeking long-term returns [29][30]