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ThinkstockA new earnings reporting season kicks off this week, with the big banks and a few other companies leading the way. Although coronavirus concerns have been minimized as the broad markets have stabilized, there still will be an impact on these reports.
Banks will be central in leading the economic recovery, through small business lending, among other things. The numbers that these institutions post will be an important barometer for what comes next.
24/7 Wall St. has put together a preview of some of the major companies kicking off the new earnings reporting season.
Citigroup Inc. (NYSE: C) is expected to reveal its third-quarter results on Tuesday before the open. The consensus estimates call for $0.90 in earnings per share (EPS), as well as $17.17 billion in revenue. Citigroup stock recently has been trading near $45 a share. The consensus price target is $65.36. The stock has a 52-week
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The COVID-19 crisis has been the great accelerator in many areas.
This unprecedented crisis has also exposed Citigroup’s (C) strategic vulnerabilities inherent in its business model. Putting it simply, running an emerging-markets global consumer bank under the umbrella of a globally-systemic bank in hindsight is completely sub-optimal (if not insane!).
Selling the Asian and Mexico consumer franchises is extremely accretive for shareholders, and in this article, I will explain why.
Citi will probably do just fine once the economy normalises and will likely trade above tangible book once again, so I would certainly buy the stock at current valuations. Nonetheless, a strategic rethink can unlock massive shareholder value and turbo-charge returns. This is the opportunity presenting itself to Citi’s new management team and one that investors should pay close attention to.
Revisiting the Corbat’s Strategy
Citi’s CEO strategy was aimed at delivering a mid-teens return on tangible equity (RoTCE). It