{"id":57694,"date":"2023-09-06T15:27:17","date_gmt":"2023-09-06T19:27:17","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/wells-fargo-citigroup-stock-is-pricing-in-too-much-fear\/"},"modified":"2023-09-06T15:27:20","modified_gmt":"2023-09-06T19:27:20","slug":"wells-fargo-citigroup-stock-is-pricing-in-too-much-fear","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=57694","title":{"rendered":"Wells Fargo: Citigroup Stock Is ‘Pricing in Too Much Fear.’"},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n
<\/div>\n<\/figure><\/div>\n

\n Citigroup
\n has long been a disappointing stock for investors and it is proving to be a head-scratcher for
\n Wells Fargo
\n Securities analyst Mike Mayo.<\/p>\n

Shares of
\n Citigroup
\n (ticker: C) are down 37% since Jane Fraser became chief executive in March 2021. That lags the
\n SPDR S&P Bank ETF
\n (KBE), which is down 21% over the same period as well as the
\n S&P 500,<\/span>
\n which has gained 18% since then. Even worse, the stock trades at roughly half of its tangible book value\u2014its lowest since the global financial crisis, Mayo notes.<\/p>\n

\n

Citigroup\u2019s stock is \u201cpricing in too much fear,\u201d Mayo wrote Tuesday. \u201cWe estimate tangible book value increasing from $85 to ~$100 by 4Q25 because\u2014unlike many past times\u2014we don\u2019t see holes in the balance sheet.\u201d <\/p>\n

Accordingly, Mayo has an Outperform rating on shares and a $55 price target, implying 32% upside from recent trading levels.<\/p>\n

While Citigroup shares have lagged\u2014 over the last five years, its shares are down 40% while the KBE is down by 20%\u2014the bank\u2019s issues predate Fraser\u2019s tenure. Fraser, in fact, was brought in to lead a turnaround at the bank after a series of missteps under its previous CEO, including missed financial targets and regulatory fines for weaknesses in its risk management and internal controls.<\/p>\n

Mayo sees several positives for the stock. Many banks are being more cautious about share repurchases after a slew of bank failures this spring led regulators to call for higher capital requirements in the sector. But Mayo expects that repurchases at Citigroup should account for 6% of the bank\u2019s market cap this year, 9% in 2024, and 18% in 2025.<\/p>\n

Mayo also believes costs will be less of an issue for Citigroup as it continues the streamlining it embarked on when Fraser took the lead. Among its initiatives, Citigroup has exited operations in 14 countries, preferring to focus on more profitable regions, ultimately making the bank more efficient.<\/p>\n

And if that isn\u2019t enough for most investors, Mayo takes comfort in who does own the stock. <\/p>\n

\u201cEven Warren Buffett still owns the shares,\u201d he wrote.<\/p>\n

If Citigroup is good enough for the Oracle of Omaha, it may be a winner for other investors.<\/p>\n

Write to Carleton English at carleton.english@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Citigroup has long been a disappointing stock for investors and it is proving to be a head-scratcher for Wells Fargo Securities analyst Mike Mayo. Shares of Citigroup (ticker: C) are down 37% since Jane Fraser became chief executive in March 2021. That lags the SPDR S&P Bank ETF (KBE), which is down 21% over the […]<\/p>\n","protected":false},"author":1,"featured_media":57695,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-57694","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nWells Fargo: Citigroup Stock Is 'Pricing in Too Much Fear.' | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Citigroup has long been a disappointing stock for investors and it is proving to be a head-scratcher for Wells Fargo Securities analyst Mike Mayo. 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