Citigroup Reports Q2 Earnings: Buy, Sell or Hold?

Citigroup (C) stock is down more than 2% in early trading Friday despite beating top- and bottom-line expectations for its second quarter.

In the quarter ended June 30, Citigroup’s revenue increased 3.6% year-over-year to $20.1 billion, which it said was driven by growth across all businesses, particularly in Banking, U.S. Personal Banking and Markets. Its earnings per share (EPS) increased 14.3% to $1.52 from the year-ago period.

“Our results show the progress we are making in executing our strategy and the benefit of our diversified business model,” Citigroup CEO Jane Fraser said in a statement. “We achieved positive operating leverage with revenue up 4% and a 2% decline in expenses.”

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Citigroup Q2 earnings

The results beat analysts’ expectations. Wall Street was anticipating revenue of $20.07 billion and earnings of $1.39 per share, according to CNBC.

Citigroup reiterated that it will be increasing its dividend by 6% in the third quarter, which it first announced on June 28 after the Federal Reserve stress test process.

“The recent stress rests again showcased the strength of our balance sheet,” Fraser said. “Our CET1 ratio now stands at 13.6% and we are increasing our dividend by 6%.”

“We will continue to execute our transformation and our strategy so we can meet our medium-term targets and continue to further improve our returns over time,” Fraser concluded.

Citigroup also plans to repurchase $1 billion of shares in the current quarter after repurchasing $500 million in the first quarter and none in the second quarter.

JP Morgan Chase (JPM) and Wells Fargo (WFC) reported earnings this morning as well, as the earnings calendar for this season heats up. 

JP Morgan reported revenue of $51 billion and earnings of $4.40 per share, topping expectations of revenue of $49.9 billion and earnings of $4.19 per share. Wells Fargo also topped estimates, with revenue of $20.7 billion and EPS of $1.33, versus expectations of revenue of $20.3 billion and earnings of $1.29 per share.

Is Citigroup stock a buy, sell or hold?

Wall Street is bullish on Warren Buffett holding. According to S&P Global Market Intelligence, the average analyst target price for Citigroup stock is $69.69, representing implied upside of more than 9% to current levels. Additionally, the consensus recommendation is a Buy.

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