On Monday, Argus raised the price target for Citigroup shares to $72 from $70, while maintaining a Buy rating on the stock. The upward revision follows Citigroup's second-quarter earnings release on July 12, 2024, which reported adjusted earnings of $1.57 per share. This figure represents an increase from the $1.33 per share earned in the same quarter of the previous year and surpasses the consensus estimate of $1.39.
Citigroup's management has reaffirmed its revenue guidance for 2024, projecting revenues between $80 billion and $81 billion. This forecast suggests a 4% growth from the 2023 figures. Additionally, the company plans to keep expenses in the range of $53.5 billion to $53.8 billion, slightly lower than the adjusted expense of $54.3 billion reported in 2023. Citigroup's cost management strategy includes reducing headcount, exiting certain international markets, and implementing other efficiency measures.
The financial institution has also announced an enhancement in shareholder returns, following the results of the Federal Reserve's June stress test. Citigroup is increasing its quarterly dividend by 6%, signaling confidence in its financial stability and profitability.
The revised price target of $72 implies a price-to-earnings multiple of 12.5 times Argus's estimated earnings per share for 2024. This adjustment reflects a valuation more in line with Citigroup's peers, as the firm acknowledges the positive impact of Citigroup's ongoing restructuring efforts.
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