Citigroup: No Longer The Value Play That It Once Was
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William Davis260 FollowersFollow5ShareSavePlay(12min)CommentsSummaryCitigroup is executing a multi-year reorganization to streamline operations and expand in high-margin, wealthier regions, driving recent stock gains.Despite robust financial health and a successful turnaround, C’s current valuation reflects much of the anticipated upside, warranting a hold rating.Operational volatility, below-sector profitability (ROE 6.95%), and rising charge-off rates present execution risks that temper further near-term appreciation.With C trading near fair value (forward P/E ~14x, price-to-book 1.03), limited catalysts exist for new investors until further catalysts or a price retreat emerge. VV Shots/iStock Editorial via Getty Images Investment Thesis Citigroup (C) is in the process of undergoing a multi-year reorganization that is intended to help streamline the company’s operations while it is also working to expand into high-margin services in wealthier regions. These efforts have had aThis article was written byWilliam Davis260 FollowersFollowWilliam has been an avid student of the stock market for over a decade. Being an avid student of political economics his entire professional life gives him a unique insight into the macroeconomy and how it impacts assets. Having learned the value of a comprehensive and fundamental approach, he has a keen eye for identifying hidden gems. Currently, he spends much of his time analyzing data and writing for financial websites.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.