C - Citigroup: The Potential Breakout Is Coming (Rating Upgrade)

2024-04-15 08:30:00 ET

Summary

• Citigroup investors have enjoyed a remarkable recovery over the past year.
• Citigroup still expects its net interest income to fall this year.
• However, its restructuring efforts are progressing well and could improve further.
• C's material undervaluation doesn't seem to have garnered enough respect from the market.
• With C well-poised for a potential breakout above the $60 level, it's time for C buyers to load up.

Citigroup ( C ) investors have enjoyed a fantastic recovery, as C posted a 1Y total return of 33%. The doom and gloom that overshadowed C's tepid performance was lifted as the leading banking stocks continued their resurgence from last year's banking crisis. As a result, C revisited levels last seen in early 2022, giving CEO Jane Fraser and her team a much-needed vote of confidence over their restructuring plans. While I have been generally bullish on C over the past year, I turned more cautious on C in my previous update, as I expected the risk/reward to be less attractive. However, that thesis has turned out to be too cautious, as C continued its solid performance, outperforming the S&P 500 ( SPX ) ( SPY ) easily over the same period....

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