Citigroup (C): Analyst Updates & Analysis

Major U.S. banks reported mixed Q3 results, with all six stocks falling despite some strong performances. Wells Fargo beat earnings but missed revenue, while JPMorgan missed expectations but offered better forecasts. Citigroup had strong revenue growth but shares dropped. Bank of America missed targets and faced a regulatory penalty. Goldman Sachs and Morgan Stanley beat expectations but shares declined. Cramer noted investor concerns about future economic conditions.

Citigroup (NYSE: C) plans to deconsolidate and pursue an IPO for its Banamex unit, targeting over $3 billion in proceeds. The move follows partial divestitures to investors. Citigroup offers a 2.07% dividend yield with a 24% payout ratio and 4.4% 3-year growth. Its GF Score is 78, reflecting strong profitability and growth but weak financial strength due to high debt.

Citigroup reported Q3 2026 net income of $5.25 bn, up 40% YoY, with EPS of $2.85 beating estimates. Revenue rose 8% to $23.85 bn, driven by growth in Services, Wealth, and Investment Banking. Trading revenue increased 6% YoY but fell 13% QoQ. The bank returned $4.1 bn to shareholders and reported an 11.5% ROTCE. Analysts lowered price targets despite the earnings beat.

Citigroup (C) plans to spin off its Mexican consumer banking business, Banamex, for an IPO in early 2025. Banamex's new leadership is pitching a turnaround strategy to investors, aiming to regain market share. Citigroup seeks to raise over $3 billion through the IPO, with a syndicate of global banks leading the offering. Banamex's market share has declined from 22% to 6% since Citigroup's acquisition in 2001.

Bank earnings were mixed. Goldman Sachs (GS) and Morgan Stanley (MS) beat estimates, while JPMorgan (JPM) and Bank of America (BAC) missed. Citigroup (C) beat but fell on guidance. Wells Fargo (WFC) beat EPS but missed revenue. BlackRock (BLK) and State Street (STT) also reported. Regulatory penalties and rate hike bets impacted shares.

US banks reported weaker fixed income trading revenues in Q3 due to high interest rate volatility. Morgan Stanley, JPMorgan, and Bank of America saw declines of 7%, 4%, and 17% respectively, while Goldman Sachs remained flat and Citigroup increased by 4%. Rising yields led to higher unrealized losses in bond portfolios, with Bank of America reporting $109 billion in losses. Equity trading revenues grew significantly, with Goldman Sachs up 72% and Morgan Stanley up 41%.