US stock futures edge lower after S&P 500 hits record high; PCE data in focus
Investing.com - Piper Sandler has reiterated its Overweight rating on Citi (NYSE:C), describing the bank as "the most compelling universal value play" with a long-term turnaround story that continues to attract bullish investor sentiment. Trading at a P/E ratio of 13.4x and price-to-book of 0.83x, InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value.
The research firm noted that Citi had experienced some weakness earlier this year when Liberation Day concerns prompted investors to avoid globally-exposed financial institutions. These market fears have since subsided, allowing investors to become "much more comfortable reengaging with the name." The stock has demonstrated strong momentum, posting a 24% gain over the past six months and currently trading near its 52-week high of $88.83.Discover more insights about Citi and other financial stocks with InvestingPro, which offers exclusive analysis and 10+ additional ProTips for informed investment decisions.
Piper Sandler expects Citi to maintain its fiscal year 2025 revenue and expense guidance during upcoming communications. The firm also highlighted increasing investor focus on capital management given the improving regulatory environment for financial institutions.
While Piper Sandler doubts Citi will significantly increase its current quarterly repurchase rate of approximately $1.75 billion due to Basel III Endgame (B3E) uncertainty, it anticipates management will present a "very constructive" medium-term outlook for more aggressive capital management.
The research firm’s continued Overweight recommendation is based on Citi’s combination of improving profitability, positive operating leverage creation, and discounted valuation compared to peers. With a market capitalization of $160.6 billion and a consistent 15-year track record of dividend payments, currently yielding 2.57%, the bank maintains a strong position in the financial sector.
In other recent news, Citigroup has been active on multiple fronts. BofA Securities raised its price target for Citigroup to $100 from $89, maintaining a Buy rating. This adjustment reflects confidence in CEO Jane Fraser’s turnaround strategy, highlighting actions like exiting international consumer markets and investing in technology. Citigroup also filed an 8-K report disclosing exhibit documents related to its Medium-Term Senior Notes, Series N, registered on the New York Stock Exchange.
Additionally, Citigroup has partnered with Carlyle Group (NASDAQ:CG) to provide asset-backed financing to fintech lenders, a growing segment in the private credit market. This collaboration will include sharing market intelligence and exploring co-investment opportunities. Meanwhile, Citigroup reaffirmed its position on the Swiss franc, expecting the Swiss National Bank to avoid cutting interest rates into negative territory. These developments come as Citigroup continues to implement strategic initiatives under Fraser’s leadership.
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