Citi stock saw a significant boost on Wednesday, rising 6.3% after the company reported a robust fourth-quarter earnings performance. The bank exceeded Wall Street expectations on both earnings and revenue, signaling strength across multiple business units. This positive financial report has fueled investor confidence, pushing Citi stock to new heights.
CEO Jane Fraser emphasized that 2024 was a pivotal year for Citigroup, with the company’s strategy proving effective in driving improved performance. “Our results show our strategy is delivering as intended and driving stronger performance in our businesses,” Fraser stated in a press release. Citigroup’s net income rose nearly 40%, reaching $12.7 billion, while the company also surpassed its full-year revenue target, bolstered by record results in services, wealth management, and U.S. personal banking.
Citi Stock Performance in Q4: Strong Earnings Beat Expectations
Citigroup’s Q4 earnings came in at $1.34 per share, exceeding analysts’ forecasts of $1.22. Revenue for the quarter reached $19.58 billion, surpassing the expected $19.49 billion. This solid performance marked a sharp improvement compared to the prior year, when the company faced a net loss of $1.84 billion due to various charges taken in Q4 of 2023. The bank’s revenue grew by 12% year-over-year, indicating strong recovery and growth.
One of the most notable aspects of the report was Citi’s impressive turnaround in net income, which rose to $2.86 billion. This marked a stark contrast to the net loss of $1.84 billion reported during the same period last year. The bank also projected its return on tangible common equity to range between 10% and 11% by 2026, lower than its earlier target of 11% to 12%. However, CEO Fraser reassured investors, saying that this figure represents an interim goal. “This level is a waypoint, not a destination,” she remarked, with plans for Citi stock returns to increase as the company continues investing in its future.
Citi Stock Driven by Strong Performance Across Key Segments
Citigroup’s growth was driven by strong performances across several key business segments in Q4. The investment banking division stood out, with revenue surging 35% year-over-year to $925 million. Much of this growth came from the continued demand for investment-grade corporate debt issuance, which greatly benefitted Citi’s investment banking sector. Total banking revenue grew 12%, with the increase rising to 27% when considering the impact of loan hedging.
The markets division also saw a significant revenue boost, jumping 36% year-over-year to $4.58 billion. Both fixed income and equity businesses saw growth, with fixed income markets revenue reaching $3.48 billion, well above analysts’ expectations of $2.95 billion, according to StreetAccount.
Meanwhile, Citi’s wealth and services units saw impressive growth, with wealth management revenue climbing 20% and services growing 15% compared to last year.
Citi Stock Reflects Strong Cost Management and Expense Strategy
Citigroup’s cost of credit for Q4 came in at $2.59 billion, which was lower than the $3.55 billion reported in the previous year. Additionally, the company added $203 million to its allowance for credit losses, reflecting a more cautious but steady approach to managing risks.
A significant portion of the conversation during the earnings call focused on the bank’s transformation efforts. CFO Mark Mason suggested that Citigroup’s expenses would decline slightly in 2025, though they would remain somewhat elevated due to the ongoing repositioning of the company. Fraser emphasized that the temporary increase in expenses is necessary to lay the groundwork for long-term success. “We all want transformation to get done quickly, and we want it to get done right,” she said.
As part of its future outlook, Citi also discussed its plans to launch an IPO for its Banamex business, although CEO Fraser suggested the offering may not take place until 2026, extending the timeline for this major move.
Citi Stock: Positive Outlook for 2025 and Beyond
Citigroup’s stock has performed strongly throughout 2024, gaining nearly 37% over the year. The stock has continued its upward trajectory in 2025, rising more than 4% as of mid-January. This continued growth reflects the positive market response to the company’s strong fourth-quarter performance and the execution of its strategic initiatives.
Adding to the optimism around Citi stock is the announcement of a $20 billion stock buyback. CFO Mason stated that about $1.5 billion of this buyback will be completed in the first quarter of 2025. This buyback program is expected to enhance shareholder value and further support the positive trajectory of Citi stock.
Despite challenges, Citigroup’s solid performance in Q4 is indicative of its ability to adapt and thrive in a competitive banking environment. With key segments like investment banking, markets, and wealth management all showing robust growth, Citi is well-positioned to continue its success in the coming years.
As CEO Fraser leads the company through its transformation efforts, Citi stock remains a promising investment, with strong fundamentals and a clear strategy for long-term growth. The company’s recent earnings report reinforces the belief that Citigroup is on the right track to fully realize its potential, making it an attractive option for investors in 2025 and beyond.
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