US bank earnings and price forecasts: Citigroup Inc Q2 2022 results preview

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Citigroup trades on valuation discount and dividend premium to its peers ahead of Q2 results.

Source: Bloomberg

 

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 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 11 July 2022 

When are the Citigroup results expected?

Citigroup is set to release second quarter results for the fiscal year 2022 (Q2 2022) on the 15th of July 2022.

What is ‘The Street’s’ expectation for the Q2 2022 results?

‘The Street’ expectations for the upcoming results are as follows:

- Revenue of $18.098 billion (+3.57% year-on-year - YoY)

- Earnings per share $1.69 (-35.89% YoY)

How to trade Citigroup into the results

Source: Refinitiv

 

Refinitiv data shows a consensus (27) of analyst ratings at ‘buy’ for Citigroup.

A mean of estimates suggest a long-term share price target of $60.17 for the company. The current share price trades at a 29% discount to this assumed long-term fair value (as of the 11th of July 2022).

Source: IG

 

 

IG sentiment data shows that 95% of clients with open positions on the share (as of the 11th of July 2022) expect the price to rise over the near-term, while 5% of these clients expect the price to fall.

Source: IG

 

The above table compares Citigroup against a peer average (which includes Goldman Sachs, Bank of America, Wells Fargo, JP Morgan and Morgan Stanley) in terms of dividend yield and price to earnings (PE) multiples.

Citigroup currently trades at a discount to its sector peers in terms of a historical and forward PE, as well as the S&P 500 benchmark index (at a PE of 28 times). The group’s dividend offering has been higher than its peers in aggregate.

Citigroup – technical view

Source: ProRealTime

 

The long-term price trend for the share price of Citigroup remains down, evidenced by the price trading firmly below the 200-day simple moving average (blue line) and the red trendline on our chart.

The share is, however, moving out of oversold territory in the very near-term. The long-term trend takes precedence with support considered at 46 and 41.30 respectively.

A downside break (confirmed with a close) of the 46.00 level would call for further decline with 41.30 the initial target considered. Only if a rebound from oversold territory takes the price back above the major high at 54.00, would we reassess the merits of returning a long bias to trades on the company.

In summary

- Citigroup is set to release Q2 2022 results on the 15th of July 2022

- Q2 2022 are expected to show a YoY increase in revenue and large decline in earnings per share

- Long-term broker consensus suggests the share to currently be a ‘buy’, with a longer-term price target of $60.17

- IG clients with open positions on the share are predominantly long

- The long-term price trend for Citigroup is down