Earnings Preview: Citigroup

Citigroup Inc. (C), a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings.

It is scheduled to report its Q2 2012 results on July 16, 2012, before the market opens. In this article I will recap the historical results of the company, latest EPS estimates vs. surprises, latest developments and closest competitors' development.

Technical Overview

The stock has a market capitalization of $77.29B and is currently trading at $26.36 with a 52 week range of $21.40 - $41.40. The stock performance year to date: 0.27%. It is currently trading below 20, 50 and 200 SMA.

Key Metrics

• Trailing P/E: 7.34
• Forward P/E: 5.78
• Price/Sales: 1.19
• Price/Book: 0.43
• PEG Ratio: 0.85
• Total Debt: 646.45B
• Annual dividend yield: 0.20%
• Return on Equity: 6.24%
• Return on Assets: 0.57%

Recent EPS Actuals vs. Estimates

In the last quarter the company reported $1.11 EPS, beating analyst estimates of $1.00.

The consensus EPS estimate is $0.91 based on 21 analysts' estimates, down from $1.09 a year ago. Revenue estimates are $18.97B, down from $20.62B a year ago. The median target price by analysts for the stock is $40.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

• On May 20, 2012, the company was downgraded from Mkt Perform to Mkt Underperform at JMP Securities.
• On January 10, 2012, Barclays Capital reiterated Overweight rating for the company.

Latest Developments

• On June 26, 2012, Citigroup Inc announced that it has been awarded a contract renewal of its fund services to Victory Capital Management and to the Victory Funds. Citi will continue to provide administration and accounting services to Victory Capital Management and serve as the global custodian and transfer agent to the Victory Funds.
• On June 22, 2012, Reuters reported that Ratings agency Moody's downgraded 15 banks on Thursday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward looking.
• On May 31, 2012, Dow Jones reported that Citigroup Inc isn't planning to sell its Polish unit, Bank Handlowy w Warszawie SA. Other information of the deal were not disclosed.
• On May 31, 2012, Morgan Stanley announced that it has advised Citigroup Inc. that on June 1, 2012, it intends to give notice that it is exercising its right to purchase an additional 14% of Morgan Stanley Smith Barney Holdings LLC (MSSB).
• On May 25, 2012, Citigroup Inc announced that it has sold 404 million common shares in Akbank T.A.S. (Akbank) through an equity offering representing 10.1% of the equity interest in the Company for TRY5.24 per share.
• On May 22, 2012, Reuters reported that the U.S. government has filed three lawsuits against a group of large banks over losses on soured mortgage debt purchased by two small Illinois banks that failed in 2009.
• On May 22, 2012, Reuters reported that Credit Suisse Group AG had won the latest auction of mortgage-linked collateralized debt obligations from The New York Fed's Maiden Lane III portfolio of assets assumed from American International Group, Inc. during the insurer's bailout in 2008.
• On May 19, 2012, Reuters reported that Citigroup Inc and its Chief Executive Vikram Pandit on Friday won a dismissal of New York real estate developer Sheldon Solow's lawsuit accusing them of securities fraud for hiding the bank's risks during the 2008 financial crisis.
• On May 10, 2012, Citigroup Inc announced that it has been appointed by Phase4 Ventures, London based venture capital firm, to provide document safekeeping and fund administration services.
• On May 10, 2012, Reuters reported that the New York Federal Reserve sold all its TRIAXX collateralized debt obligations from a portfolio of assets that was used in the government bailout of insurer American International Group, Inc. to Bank of America Corp's Merrill Lynch, following a competitive bid process with eight other Wall Street firms.
• On May 3, 2012, Securities Arbitration Law Firm of Klayman & Toskes, P.A. ("K&T") announced that it is investigating claims on behalf of Citigroup, Inc. shareholders who sustained investment losses due to an over-concentration of Citigroup stock.
• On May 1, 2012, Reuters reported that Citigroup Inc, Morgan Stanley, UBS AG and Wells Fargo & Co on Tuesday agreed to pay more than $9.1 million in fines and restitution for selling leveraged and inverse exchange-traded funds 'without reasonable supervision'.
• On April 25, 2012, Citigroup Inc announced that it has been awarded a contract to deliver hedge fund middle office services to Spartus Capital Management LP -- a new divergent volatility strategies hedge fund.
• On April 23, 2012, Dow Jones reported that Citigroup Inc, Credit Suisse Group AG and Goldman Sachs Group Inc are banding together to outbid five other Wall Street dealers for some $7.5 billion in complex commercial mortgage-backed securities taken on by the Federal Reserve Bank of New York during the 2008 bailout of American International Group.
• On April 19, 2012, Reuters reported that a federal judge on Wednesday dismissed claims against Goldman Sachs Group Inc, JPMorgan Chase & Co. and 40 other defendants that they helped mislead investors in General Electric Co's $12.2 billion stock offering in 2008.
• On April 18, 2012, Citigroup Inc announced that it has declared a quarterly dividend on the Company's common stock of $0.01 per share, payable on May 25, 2012 to stockholders of record on May 7, 2012.
• On April 17, 2012, Citigroup Inc announced that Michael E. O'Neill was appointed Chairman of the Board of Directors of Citi following its annual meeting of stockholders in Dallas.
• On March 5, 2012, Dow Jones reported that ICICI Bank Limited, Bank of Baroda, Citigroup Inc. and Life Insurance Corp. of India signed a pact to jointly float an infrastructure debt fund.
• On March 2, 2012, Citigroup Inc announced that Richard D. Parsons will not seek re-election to the Board of Directors at the upcoming Annual Meeting of Stockholders in April.
• On February 24, 2012, Citigroup Inc announced it has sold 145.3 million shares in Housing Development Finance Corporation Ltd. (HDFC) through the National Stock Exchange, representing the entirety of its 9.85% interest, for INR657.56 per share.
• On February 17, 2012, Citigroup Inc announced the declaration by its Board of Directors of a dividend of $0.01 per share of common stock payable on February 24, 2012 to holders of record on February 6, 2012.
• On January 31, 2012, Citigroup Inc announced that its Global Transaction Services business, acting through Citibank N.A., has been appointed by AB Electrolux, a global leader in household appliances and appliances for professional use, as the successor depositary bank for its sponsored Level 1 American Depositary Receipt (ADR) program.
• On January 25, 2012, Reuters reported that Citigroup Inc was sued for fraud by Loreley Financing over nearly $1 billion worth of collateralized debt obligations purchased in 2006 and 2007.
• On January 24, 2012, Dow Jones reported that Citigroup Inc's India unit is restructuring its operations in a move that will affect about 100 positions. Citigroup continuously reviews its internal processes and organizational structure to right size the organization for efficient growth.

Competitors

Citigroup, Inc. operates in Money Center Banks industry. The company could be compared to Bank of America Corporation (BAC), JPMorgan Chase & Co. (JPM), U.S. Bancorp (USB), and Wells Fargo & Company (WFC). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)

C data by YCharts

Competitors' Latest Development

• On July 6, 2012, Resolute Mining Limited announced that Bank of America Corporation and its related bodies corporate have ceased to be shareholders of the Company effective June 29, 2012.
• On July 6, 2012, Reuters reported that a U.S. judge has ordered JPMorgan Chase & Co. to explain why the court should not force the bank to turn over 25 internal emails demanded as part of an investigation into whether it manipulated electricity markets in California and the Midwest.
• On July 4, 2012, Reuters reported that U.S. energy regulators have subpoenaed JPMorgan Chase & Co. to produce 25 internal emails as part of an investigation into whether the bank manipulated electricity markets in California and the Midwest.
• On July 3, 2012, Reuters reported that JPMorgan Chase & Co.'s One Equity Partners, the Company's private investment arm, will buy technology services firm M*Modal Inc. for about $1.1 billion in cash.
• On June 25, 2012, Reuters reported that Julius Baer Gruppe AG in talks with Bank of America Corporation about buying Merrill Lynch's non-U.S. wealth management unit, is particularly interested in its presence in Asia and Latin America.
• On June 25, 2012, Integra Mining Ltd. announced that JPMorgan Chase & Co. and its affiliates have ceased to be shareholders of the Company effective April 9, 2012.
• On June 25, 2012, Wells Fargo & Company announced that it has reached a definitive agreement to acquire WestLB's subscription finance portfolio. The portfolio contains approximately $6 billion in commitments (approximately $3 billion outstanding).
• On June 22, 2012, Reuters reported that Ratings agency Moody's downgraded 15 banks on Thursday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward looking.
• On June 21, 2012, Reuters reported that Bank of America Corp directors have reached a definitive settlement of litigation by shareholders, who accused the bank of overpaying for Merrill Lynch & Co, a federal judge said on Wednesday.
• On June 21, 2012, Reuters reported that JPMorgan Chase & Co.'s asset management business has created a new unit, which will oversee $100 billion in assets under management and incorporate teams from the company's investment management and wealth management divisions.
• On June 19, 2012, Reuters reported that Japan has excluded Nomura Holdings, Inc. from working on the government's sale of roughly $6 billion worth of JAPAN TOBACCO INC. shares.
• On June 15, 2012, Wells Fargo & Co announced that it has doubled its ExpressSend remittance network payout locations in India through an agreement with HDFC Bank Limited.
• On June 12, 2012, Indophil Resources NL announced that Bank of America Corporation and its related bodies corporate have ceased to be shareholders of the Company effective June 7, 2012.
• On June 11, 2012, REN Redes Energeticas Nacionais SGPS SA (REN)announced that on June 11, 2012 JP Morgan Securities Ltd, a subsidiary of JPMorgan Chase & Co, acquired 28,131,422 ordinary shares class A, corresponding to 5.272% of REN's share capital .
• On June 6, 2012, Reuters reported that U.S. bank regulators will review whether JPMorgan Chase & Co. executives should have to give back compensation due to the bank's failed hedging strategy that has produced at least $2 billion in losses.
• On May 30, 2012, Reuters reported that Wells Fargo & Co as promised $432.5 million in lending and other payments to end a lawsuit accusing the bank of discriminatory lending practices in Memphis, Tennessee.
• On May 25, 2012, Bank of America Corp announced that it and Barclays Bank PLC have entered into an agreement with Equity Residential and Lehman Brothers Holdings Inc pursuant to which Bank of America and Barclays will sell their remaining 26.5% interest in Archstone, a privately held owner, operator and developer of multifamily apartment properties, for a purchase price of $1.58 billion to Lehman pursuant to Lehman's exercise of its right of first offer.
• On May 22, 2012, Reuters reported that the U.S. government has filed three lawsuits against a group of large banks over losses on soured mortgage debt purchased by two small Illinois banks that failed in 2009.
• On May 22, 2012, Reuters reported that Credit Suisse Group AG had won the latest auction of mortgage-linked collateralized debt obligations from The New York Fed's Maiden Lane III portfolio of assets assumed from American International Group, Inc. during the insurer's bailout in 2008.
• On May 21, 2012, Elders Limited announced that Bank Of America Corporation and its related bodies corporate have ceased to be shareholders of the Company effective May 17, 2012.
• On May 21, 2012, Reuters reported that JPMorgan Chase & Co.'s CEO Jamie Dimon took another step in the wake of $2 billion loss, or more, on derivatives by announcing on Monday that the Company will quit spending capital on stock buybacks.
• On May 19, 2012, Reuters reported that The Commodity Futures Trading Commission (CFTC) has opened an investigation into possible wrongdoing at JPMorgan Chase & Co in connection with the bank's multi-billion-dollar trading loss, a source familiar with the probe told Reuters.
• On May 17, 2012, Reuters reported that Royal Bank of Canada and Credit Suisse Group AG are among suitors who have put in initial bids to buy the non-U.S. wealth management business of Bank of America Corporation in a deal that could be worth about $2 billion.
• On May 16, 2012, Reuters reported that The FBI has opened an inquiry into the multibillion-dollar trading losses at JPMorgan Chase, stepping up pressure on the bank after key U.S. agencies said they were looking into high-risk trades that first drew regulators' attention last month.
• On May 15, 2012, Reuters reported that a U.S. federal judge in New York on Monday refused to delay the approval process for a controversial $20 million settlement between Bank of America Corp Directors and shareholders who accused the bank of overpaying for Merrill Lynch & Co. U.S. District Judge Kevin Castel rejected as premature a request by another shareholder group, pursuing a similar lawsuit against Bank of America directors, to intervene in the New York case.
• On May 11, 2012, JPMorgan Chase & Co. announced that it has suffered $2 billion or more in trading losses. A May 11, 2012 Wall Street Journal article indicates the 'losses stemmed from wagers gone wrong in the bank's Chief Investment Office' and involved losses in derivative positions.
• On May 11, 2012, Levi & Korsinsky announced that it is investigating potential claims on behalf of purchasers of JPMorgan Chase & Co. (JPMorgan or the Company)securities concerning possible breaches of fiduciary duty.
• On May 10, 2012, Reuters reported that the New York Federal Reserve sold all its TRIAXX collateralized debt obligations from a portfolio of assets that was used in the government bailout of insurer American International Group, Inc. to Bank of America Corp's Merrill Lynch, following a competitive bid process with eight other Wall Street firms.
• On May 1, 2012, Reuters reported that Bank of America Corporation is planning to cut up to 400 jobs in its investment banking, corporate banking, and sales and trading units.
• On May 1, 2012, Reuters reported that Citigroup Inc, Morgan Stanley, UBS AG and Wells Fargo & Co on Tuesday agreed to pay more than $9.1 million in fines and restitution for selling leveraged and inverse exchange-traded funds 'without reasonable supervision'.
• On April 27, 2012, Noble Mineral Resources Ltd announced that Bank of America Corporation and its related bodies corporate have ceased to be substantial shareholders of the Company effective April 24, 2012.
• On April 25, 2012, Reuters reported that a New York judge on Tuesday rejected an effort by American International Group, Inc. and other objectors to Bank of America Corporation's proposed $8.5 billion mortgage bond settlement to convert the case to a proceeding that may have widened its scope.
• On April 25, 2012, JPMorgan Chase & Co. announced that Freepoint Commodities LLC, has entered into a definitive agreement to acquire J.P. Morgan Metals & Concentrates LLC, merchant of physical base metal concentrates and copper cathodes.
• On April 24, 2012, MacroSolve Inc announced its latest patent infringement suits filed against AOL, Inc., and Bank of America Corporation. MacroSolve's suit claims that both companies infringed upon its U.S. Patent No. 7,822,816.
• On April 24, 2012, Wells Fargo & Co announced a quarterly common stock dividend of $0.22 per share. The dividend is payable June 1, 2012, to stockholders of record on May 4, 2012.
• On April 24, 2012, Wells Fargo Bank, part of Wells Fargo & Coannounced that it has closed the acquisition of the North American reserved-based and related diversified energy lending business of BNP Paribas.
• On April 23, 2012, Dow Jones reported that Citigroup Inc, Credit Suisse Group AG and Goldman Sachs Group Inc are banding together to outbid five other Wall Street dealers for some $7.5 billion in complex commercial mortgage-backed securities taken on by the Federal Reserve Bank of New York during the 2008 bailout of American International Group.
• On April 21, 2012, The Associated Press reported that a recently proposed $20 million settlement of shareholder claims by Bank of America Corporation over its 2009 acquisition of Merrill Lynch is being challenged by a separate group of shareholders as too small.
• On April 19, 2012, Reuters reported that a federal judge on Wednesday dismissed claims against Goldman Sachs Group Inc, JPMorgan Chase & Co. and 40 other defendants that they helped mislead investors in General Electric Co's $12.2 billion stock offering in 2008.
• On April 17, 2012, Reuters reported that Bank of America Corporation's Bank of America Merrill Lynch has put its wealth management units outside the United States up for sale, hoping to bring in up to $3 billion for the sub-scale business.
• On April 13, 2012, Reuters reported that Bank of America Corporation and US Bancorp have been sued by a Chicago pension fund that said they failed to protect investors in their roles as trustees for mortgage backed securities for Washington Mutual Inc.
• On April 4, 2012, Reuters reported that according to the Commodity Futures Trading Commission (CFTC) JPMorgan Chase & Co will pay $20 million to settle charges that it unlawfully handled customer segregated funds at Lehman Brothers Holdings Inc. The CFTC said that for about 22 months, ending with Lehman's bankruptcy in September 2008, JPMorgan had improperly extended intra day credit to Lehman Brothers based in part on customers' segregated funds Lehman had deposited at the bank.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.