- If you are wondering whether Citigroup at around US$107 per share still offers value or if most of the opportunity has already played out, the recent share price history gives you some useful clues.
- The stock has pulled back, with a 3.9% decline over the last 7 days and a 2.6% decline over 30 days. It also sits on a 55.0% return over 1 year and 154.9% over 3 years, which can change how investors think about both upside potential and risk.
- Recent news around Citigroup has largely focused on its ongoing role as a major global bank, regulatory and capital requirements affecting large US banks, and broader sentiment toward financials. All of these factors help frame these price moves. Together, these themes shape how investors weigh the trade off between growth expectations, capital strength, and the risks that come with a large international balance sheet.
- Citigroup currently has a value score of 4 out of 6. Next up is a look at how different valuation methods line up on the stock, followed by a more complete way to think about valuation that brings those pieces together.
Approach 1: Citigroup Excess Returns Analysis
The Excess Returns model looks at how much profit a company can generate above the return that equity investors typically require. Instead of focusing on cash flows, it starts with book value and earnings power and then asks how efficiently Citigroup can use its equity base over time.
For Citigroup, the model uses a Book Value of US$110.01 per share and a Stable EPS of US$12.44 per share, based on weighted future Return on Equity estimates from 15 analysts. The Cost of Equity is US$10.28 per share, so the estimated Excess Return comes out at US$2.16 per share. That implies earnings that sit above the required return, supported by an Average Return on Equity of 9.70% and a Stable Book Value of US$128.29 per share, sourced from 12 analysts.
Putting this together, the Excess Returns model arrives at an intrinsic value of about US$175.18 per share. Versus the current price around US$107, this implies the stock is 38.8% undervalued on this framework.
Result: UNDERVALUED
Our Excess Returns analysis suggests Citigroup is undervalued by 38.8%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.
Approach 2: Citigroup Price vs Earnings
For a profitable business like Citigroup, the P/E ratio is a straightforward way to connect the share price to the earnings that support it. It tells you how many dollars investors are currently paying for each dollar of earnings.
What counts as a "normal" or "fair" P/E depends on how the market views a company’s growth prospects and risk. Higher growth or lower risk will often justify a higher P/E, while slower growth or higher risk typically aligns with a lower P/E.
Citigroup currently trades on a P/E of 14.41x. This sits above the Banks industry average of 11.15x and the peer group average of 11.66x. Simply Wall St’s Fair Ratio for Citigroup is 16.19x. This is a proprietary estimate of the P/E that might be reasonable given factors such as earnings growth, profit margin, industry, market cap and risk profile.
The Fair Ratio can be more informative than a simple comparison with peers or the broader industry because it attempts to adjust for the specific mix of growth, risk and profitability that applies to Citigroup rather than assuming one size fits all.
With a Fair Ratio of 16.19x versus the current 14.41x, the P/E suggests the shares are trading below this modelled level.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Citigroup Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives take center stage here as a simple way for you to attach a clear story about Citigroup to the numbers you care about, linking your view of its future revenue, earnings, margins and fair value to a transparent financial forecast that sits alongside the current share price on Simply Wall St’s Community page.
A Narrative is your version of Citigroup’s story expressed in numbers. You might align with a more optimistic fair value of about US$233 per share that assumes faster revenue growth, higher profit margins and a higher future P/E, or with a more cautious fair value near US$75 that uses lower growth, thinner margins and a lower multiple. You can then compare each fair value to today’s price to judge whether the stock looks expensive or cheap on that story.
Narratives on the platform are updated as new earnings, news and valuation inputs such as revenue growth, discount rates and profit margins are added. Your chosen Citigroup Narrative can therefore evolve in real time, helping you decide if and when a change in fair value is large enough relative to the current price to justify acting on your view.
Do you think there's more to the story for Citigroup? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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