Citigroup Inc., a leading global financial institution, released its financial results for the fourth quarter revealing a mixture of favorable and underwhelming metrics. The bank posted an adjusted earnings per share (EPS) figure that outperformed analyst projections, while its reported revenue and net income presented a more complex picture influenced by specific market exits and divestitures.
Specifically, Citigroup reported fourth-quarter revenue net of interest expense of $19.87 billion, marking a 2% improvement compared to the same period in the previous year. Despite this growth, the figure fell short of the analyst consensus estimate, which had anticipated revenue of approximately $20.53 billion. When adjusting for divestiture-related impacts—primarily linked to the planned sale of AO Citibank in Russia—Citi’s revenue growth was more substantial, registering an 8% increase year-over-year. This adjustment highlights how the ongoing strategic realignment affected the topline performance.
The bank's profitability metrics reflected the challenges encountered during this period. Net income declined by 13% compared with the prior year, totaling $2.5 billion. This decrease was partly driven by a significant after-tax loss of $1.1 billion associated with the exit from the Russian market. To provide investors with clarity on the underlying performance, Citigroup also reported adjusted net income of $3.6 billion. The adjusted EPS was $1.81, exceeding analyst expectations of $1.68, indicating operational resilience despite headwinds.
Mark Mason, Chief Financial Officer at Citigroup, addressed market concerns related to geopolitical developments. He emphasized that Citi is vigilantly monitoring market reactions and affirmed that the bank holds minimal exposure to geopolitical tensions, especially noting the sale of its operations in Venezuela completed in 2021, which included both corporate and retail segments. Mason refrained from commenting on potential future business initiatives concerning Venezuela, signaling a cautious approach amid uncertain conditions.
In the wake of the earnings release, Citigroup’s stock price responded positively, appreciating 4.1% to reach $117.00 during Thursday trading. This upward movement signals investor approval of the reported adjusted earnings and operational insights.
Following the earnings announcement, several financial analysts revised their price targets for Citigroup stock. Oppenheimer analyst Chris Kotowski maintained an Outperform rating for Citigroup, elevating the price target from $141 to $144, reflecting increased confidence in the bank's future prospects. Similarly, Morgan Stanley analyst Betsy Graseck retained an Overweight rating while adjusting the price target marginally upward from $134 to $135, indicating a measured yet optimistic outlook.
The combination of mixed financial results, strategic divestitures, and cautious market positioning outlines the complexities faced by Citigroup in the recent quarter. Increased price targets from leading analysts despite revenue shortfalls highlight the market's focus on earnings quality and management’s handling of geopolitical challenges.