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3 Key Predictions for Citigroup's Q3 Earnings Report
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It’s been an interesting few days around the global markets, but investors are still eagerly anticipating the slew of earnings reports coming from the big banks later this week. Of these, we can almost guarantee that investment and consumer banking behemoth Citigroup’s (C - Free Report) latest quarterly results will be an important bellwether for the rest of the financial sector.
With shares up about 27% year-to-date, Citigroup has emerged as one of the most compelling stocks in the financial sector. On top of that, excitement over the GOP’s proposed tax cuts and anticipation for another rate hike in December has sparked positive momentum throughout the banking industry.
Today, we’ll be taking a closer look at Citigroup and what types of results investors should expect to see in its key categories this quarter. By using our Zacks Consensus Estimates, as well as our exclusive non-financial metrics file, we’ve found three important things to note ahead of Citigroup’s report.
Check them out:
Earnings:
Based on the latest Zacks Consensus Estimate, we expect to see Citigroup report earnings of $1.30 per share. This would represent growth of 4% from the $1.25 per share posted in the year-ago quarter. The biggest potential headwind for this quarter will be weak trading revenues, as lower volatility around the world has likely led to a slow quarter in this unit. However, recent restructuring and streamlining initiatives should support profitability.
Efficiency Ratio:
The efficiency ratio is always an important measure of bank productivity. In short, it is a way to gauge the cost required to generate one dollar of revenue. According to our consensus estimates, Citigroup’s efficiency ratio is expected to come in at 57.4% this quarter. That would mark an improvement from the 59% ratio posted in the previous quarter, further signaling that the company’s expense management efforts have been successful.
Total Provisions For Credit Losses:
Based on our consensus estimates, we expect to see Citigroup report total provisions for credit losses in the area of $1.855 billion. This is up from $1.717 billion in the previous quarter and $1.736 in the year-ago period. Remember, while this is an estimation of potential losses due to defaulted credit, it is treated as an expense on the company’s balance sheet. With provisions rising, Citigroup will need to support earnings somewhere else.
Some of these consensus estimates are pulled from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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3 Key Predictions for Citigroup's Q3 Earnings Report
It’s been an interesting few days around the global markets, but investors are still eagerly anticipating the slew of earnings reports coming from the big banks later this week. Of these, we can almost guarantee that investment and consumer banking behemoth Citigroup’s (C - Free Report) latest quarterly results will be an important bellwether for the rest of the financial sector.
With shares up about 27% year-to-date, Citigroup has emerged as one of the most compelling stocks in the financial sector. On top of that, excitement over the GOP’s proposed tax cuts and anticipation for another rate hike in December has sparked positive momentum throughout the banking industry.
(For more on the banking industry as a whole, check out our expanded earning preview: Bank Stocks Earnings Preview: What To Expect From BAC, JPM, C, & WFC)
Today, we’ll be taking a closer look at Citigroup and what types of results investors should expect to see in its key categories this quarter. By using our Zacks Consensus Estimates, as well as our exclusive non-financial metrics file, we’ve found three important things to note ahead of Citigroup’s report.
Check them out:
Earnings:
Based on the latest Zacks Consensus Estimate, we expect to see Citigroup report earnings of $1.30 per share. This would represent growth of 4% from the $1.25 per share posted in the year-ago quarter. The biggest potential headwind for this quarter will be weak trading revenues, as lower volatility around the world has likely led to a slow quarter in this unit. However, recent restructuring and streamlining initiatives should support profitability.
Efficiency Ratio:
The efficiency ratio is always an important measure of bank productivity. In short, it is a way to gauge the cost required to generate one dollar of revenue. According to our consensus estimates, Citigroup’s efficiency ratio is expected to come in at 57.4% this quarter. That would mark an improvement from the 59% ratio posted in the previous quarter, further signaling that the company’s expense management efforts have been successful.
Total Provisions For Credit Losses:
Based on our consensus estimates, we expect to see Citigroup report total provisions for credit losses in the area of $1.855 billion. This is up from $1.717 billion in the previous quarter and $1.736 in the year-ago period. Remember, while this is an estimation of potential losses due to defaulted credit, it is treated as an expense on the company’s balance sheet. With provisions rising, Citigroup will need to support earnings somewhere else.
Some of these consensus estimates are pulled from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>