What Do Analysts Think About Citigroup Stock?
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Analysts may not be able to peer into the future any better than you or I can, but their opinions about stocks are nevertheless valuable -- studying companies, after all, is what they're paid to do.I'm interested here in analysts' take on Citigroup (NYSE: C), the nation's fourth biggest bank by assets.
Citigroup is a buy, say analysts
Generally speaking, analysts are bullish on the New York City-based bank. Of the 30 analysts surveyed by Yahoo! Finance that track Citigroup, eight rate it a strong buy and 15 rate it a buy.That leaves seven hold recommendations. And, notably, no analysts say that investors should sell shares of Citigroup.
The bullish perspective on Citigroup similarly shines through if you aggregate these recommendations, as Yahoo! Finance does with its recommendation rating scale. The lower the score, the higher the rating, and vice versa:
|
Yahoo! Finance Recommendation Rating |
Score |
|---|---|
|
Strong buy |
1 |
|
Buy |
2 |
|
Hold |
3 |
|
Sell |
4 |
|
Strong sell |
5 |
Data source: Yahoo! Finance.
Citigroup's score is 2.0, meaning that the consensus among analysts tracked by Yahoo! Finance is that the bank's shares are a solid buy.
This ranks Citigroup near the top of its peer group. While it's slightly behind Bank of America, which has a recommendation rating of 1.9, Citi narrowly out-touches JPMorgan Chase and Wells Fargo, which have recommendation ratings of 2.1 and 2.4, respectively.
In July, for example, Germany-based investment bank Berenberg initiated coverage of Citigroup with a buy recommendation. Berenberg's thesis is based in part on Citi's opportunity to continue increasing the amount of capital it returns to shareholders.
Citigroup's price target
Given analysts' generally favorable opinion of Citigroup stock, it will probably come as no surprise that they expect its stock price to head higher.The average analyst price target for Citigroup's stock is $54.19. That implies 14% upside, which is pretty good when you consider that stocks in general are flirting with all-time highs.
|
Ranking |
Price Targets for Citigroup Stock |
|---|---|
|
High |
$66.00 |
|
Average |
$54.19 |
|
Low |
$44.00 |
Data source: Yahoo! Finance.
It's important to appreciate, of course, that this isn't etched in stone. Like I noted at the beginning, analysts can't predict the future. Their price targets are educated guesses.Additionally, there's a range of forecasts when it comes to Citigroup's stock. The highest is $66 per share, while the lowest is $44 a share.
At the same time, however, it's easy to see why analysts think Citigroup's stock is going higher. Namely, its shares trade for a 35% discount to book value. This is cheap, and destined to improve, as a bank like Citigroup under normal circumstances will trade for well in excess of book value.
Put all of this together and it's fair to say that analysts think Citigroup's stock is a bargain right now.
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John Maxfield owns shares of Bank of America and Wells Fargo. The Motley Fool owns shares of and recommends Wells Fargo. The Motley Fool recommends Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.