Citigroup Earnings Preview: Second Quarter 2011

Citigroup is scheduled to report their second quarter 2011 results before the market opens on Friday, July 13, 2011. EarningsPreviews.com is expecting Citigroup to report worst than expected quarterly results that will disappoint Wall Street’s consensus expectations.

 

Earnings Analysis

Citigroup reported good, but not great earnings results last quarter. Unfortunately it looks like Citi make take another step backwards this quarter. After seven consecutive quarters of improving credit losses, we are expecting Citigroup to report an increase in the second quarter.

 

Analyst Expectations

We are forecasting revenues of $19.9 billion and EPS of $.90. This would represent earnings decline of 10 percent from last year’s $22.07 per share in the same period. The current analyst consensus estimates calls for revenues of $19.94 billion and EPS of $.97.

 

Stock Performance

Since the beginning of 2011, Citi’s stock price has declined 16 percent and has badly underperformed the 8 percent gain in the Dow Jones industrial average.  

 

Valuation

Citigroup stock is trading at a valuation of 8x consensus 2012 EPS estimates. Citi shares appear to be cheap, but there is likely more short-term pain ahead for this stock.

 

Recommendation: Hold

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