Results: Citigroup Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

By
Simply Wall St
Published
April 16, 2022
NYSE:C
Source: Shutterstock

A week ago, Citigroup Inc. (NYSE:C) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$19b, some 5.9% above estimates, and statutory earnings per share (EPS) coming in at US$2.02, 39% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Citigroup

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NYSE:C Earnings and Revenue Growth April 16th 2022

Taking into account the latest results, the 18 analysts covering Citigroup provided consensus estimates of US$71.6b revenue in 2022, which would reflect a discernible 4.6% decline on its sales over the past 12 months. Statutory earnings per share are expected to crater 49% to US$5.40 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$71.7b and earnings per share (EPS) of US$6.60 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at US$66.39, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Citigroup analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$53.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Citigroup's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.0% by the end of 2022. This indicates a significant reduction from annual growth of 1.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Citigroup is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Citigroup's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Citigroup going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Citigroup (including 1 which is a bit concerning) .

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