Citigroup Inc. , the fourth largest of the four “too big to fail” money center banks, reported quarterly earnings before the opening bell this morning, Jan. 16. The banking giant beat analysts’ estimates, and the stock traded as high as $79.20 before the open. These results were adjusted for the accounting effects following the passage of tax reform.
The stock closed last Friday at $76.84, up 3.3% year to date and in bull market territory at 39.1% above its 52-week low of $55.23 set on Feb. 2, 2017. The stock set its 52-week intraday high of $78.44 on Jan. 16, 2018. Citigroup ended the third quarter of 2017 with $1.41 trillion of assets on its balance sheet, which equates to 8.2% of the entire banking system. This represents a year-over-year gain of 3%, so this “too big to fail” bank keeps getting bigger.
One segment to keep an eye on is credit card debt, which spiked above $1 trillion for the first time. There could be a wave of defaults as consumers move away from a low teaser rate up to a rate that is likely to be between 15% and 25%, depending on credit score. These rates will rise each time the Federal Reserve raises the federal funds rate. (See also: Why Big Bank Stocks Can Rise 20%:Barclays.)
The fourth largest of the four “too big to fail” money center banks has a reasonable P/E ratio of 14.81 and a dividend yield of 1.67%. …read more
Read more here: Citigroup Beats Earnings; Stock Pops to a New High