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Citigroup Q4 Earnings on the Deck: How to Approach the Stock Now?
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Key Takeaways
C is expected to post y/y gains in Q4 sales and earnings ahead of its Jan. 14 earnings release.
C is likely to gain from higher NII and stronger loan demand, alongside a rebound in investment banking fees.
C faces elevated expenses from transformation efforts and a Russia exit, with rising non-accruals.
Citigroup Inc. (C - Free Report) is slated to report fourth-quarter and full-year 2025 results on Jan. 14, 2026, before market open.
In the first nine months of 2025, Citigroup witnessed increases in net interest income (NII) and non-interest revenues. The company also registered a solid increase in Investment Banking (IB) revenues, driven by a rebound in deal-making activity.
This globally diversified financial services holding company is expected to register bottom and top-line increases in the to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter sales is pegged at $20.94 billion, indicating a 6.9% year-over-year increase. The consensus estimate for earnings for the to-be-reported quarter has been revised downward to $1.65 over the past seven days. The figure indicates a 23.1% rise from the prior-year quarter’s actual.
Estimate Revision Trend
Image Source: Zacks Investment Research
The company also has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 13.19%.
Earnings Surprise History
Image Source: Zacks Investment Research
Factors to Influence Citigroup’s Q4 Results
NII: The Federal Reserve reduced interest rates twice in the fourth quarter, following a 25-basis-point rate cut in September. With this, the Fed funds rate now stands at 3.50-3.75%. This is likely to have supported C’s NII in the fourth quarter, given stabilizing funding/deposit costs.
Management expects NII (excluding Markets) to rise 5.5% on a year-over-year basis. The Zacks Consensus Estimate for NII is pinned at $14.9 billion, suggesting an 8.8% year-over-year rise.
Loans: The overall lending activity was impressive in the fourth quarter. Per the Fed’s latest data, the demand for commercial and industrial and consumer loans was robust in the first two months of the quarter.
Hence, C is expected to have witnessed a decent rise in loan demand, thereby improving the average interest-earning asset balance. The Zacks Consensus Estimate for Citigroup's average interest-earning assets is pegged at $2.5 trillion, indicating an 8.6% increase from the year-ago quarter’s reported figure.
Fee Income: Global mergers and acquisitions (M&As) in the fourth quarter of 2025 surged impressively from the lows witnessed in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. Improved visibility on trade policy, a narrowing of buyer-seller valuation expectations, lower funding costs and a focus on scale and AI integration supported a pickup in deal-making activity. This is likely to have supported C’s IB revenues in the quarter to be reported.
At the 2025 Goldman Sachs U.S. Financial Services Conference, Citigroup’s chief financial officer Mark Mason, stated that the company is seeing continued momentum, particularly in M&A. Management expects IB fees to increase in the mid-20s (percentage) year over year in the fourth quarter.
Further, client activity and market volatility were solid in the fourth quarter. Major factors that impacted the trading business in the quarter included the longest U.S. government shutdown in history, a dip in consumer sentiment, easing monetary policy and a dominant AI theme. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange. Despite this, Citigroup expects market revenues to be down in the low to mid-single digit in the fourth quarter from a year ago. The Zacks Consensus Estimate for market revenues is pegged at $4.5 billion, which suggests a 1.5% decline on a year-over-year basis.
The Zacks Consensus Estimate for income from commissions and fees is pinned at $2.9 billion, which indicates a 14.6% year-over-year rise.
The Zacks Consensus Estimate for income from principal transactions is pegged at $2.1 billion, which suggests an 8% decline from the prior-year quarter’s actual.
The Zacks Consensus Estimate for administration and other fiduciary fees is pinned at $1 billion, which implies a year-over-year decrease of 5%.
The Zacks Consensus Estimate for total non-interest income for the fourth quarter of 2025 is pegged at $5.9 billion, which suggests a 2.4% rise from the prior-year quarter’s actual.
Expenses: Though Citigroup is focused on lowering expenses through organizational simplification, cost reductions, and productivity savings, the bank’s increased investments in business transformation efforts, technological advancements, and higher volume-related expenses are likely to have kept the expense base elevated in the fourth quarter of 2025. This month, Citigroup has obtained the internal approvals to proceed with the planned sale of its Russia-based banking unit, AO Citibank, to Renaissance Capital. The transaction is expected to result in a pre-tax loss of $1.2 billion in the fourth quarter of 2025.
Asset Quality: We expect the company to keep a decent reserve this time, given a slowdown in job growth, which could pressure consumer demand and lead to higher delinquencies.
The Zacks Consensus Estimate for non-accrual loans is pegged at $3.7 billion, indicating a jump of 43.8% from the prior year’s reported figure.
What Our Model Unveils for C
Our proven model does not conclusively predict an earnings beat for Citigroup this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.
Citigroup has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Citigroup expects revenues to cross $84 billion compared with the prior mentioned $84.1 billion.
NII (excluding Markets) is projected to rise 5.5% on a year-over-year basis compared with the prior stated 4.4% rise.
Management anticipates expenses to be higher than $53.4 billion, including the impacts of FX translation and excluding the goodwill impairment.
The efficiency ratio is expected to be slightly less than 64%.
Branded Cards net credit loss (NCL) is expected to be 3.50-4%.
Retail Services NCL is expected to be 5.75-6.25%.
Citigroup’s Price Performance & Valuation
In the fourth quarter of 2025, C shares gained 19.5% compared with the industry’s rise of 8.1% and the S&P 500 index increase of 4.2%. Shares of its peer Bank of America (BAC - Free Report) grew 9.7% and Wells Fargo (WFC - Free Report) shares rose 17.2% in the same period.
Price Performance
Image Source: Zacks Investment Research
Bank of America and Wells Fargo are scheduled to announce results on Jan. 14.
Now, let us look at the value Citigroup offers investors at current levels.
Currently, C is trading at 11.92X forward 12-month earnings, below the industry’s forward price/earnings (P/E) multiple of 15.35X. The company’s valuation looks inexpensive compared with the industry average.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Citigroup’s stock is also trading at a discount compared with Bank of America’s P/E of 12.82X and Wells Fargo's P/E of 13.58X.
Evaluating Citigroup Stock Ahead of Q4 Earnings
C is in the middle of a significant transformation aimed at simplifying operations, sharpening its focus on core markets, and boosting profitability. Following the receipt of approval to proceed with the sale of its Russian banking unit this month and the divestiture of a 25% stake in Banamex to a Mexican business leader in December 2025, the company is now preparing for a planned initial public offering of its Mexican consumer, small, and middle-market banking units and the wind-down of its Korean consumer banking operations. These initiatives will free up capital and help the company pursue investments in wealth management and IB operations, which will stoke fee income growth. The company is targeting annual revenue growth of 4-5% through 2026.
As part of its broader efficiency drive, Citigroup launched a two-year cost-cutting initiative in January 2024 to eliminate 20,000 jobs, which is expected to yield $2-$2.5 billion in annual savings by 2026. Further, C is increasingly deploying artificial intelligence (AI) tools to support these efforts.
Citigroup rewards shareholders handsomely. Post-clearing the 2025 Fed stress test, the company hiked its dividend 7.1% to 60 cents per share. In the past five years, it has raised its dividends three times. In January 2025, Citigroup's board of directors approved a $20-billion common stock repurchase program with no expiration date. As of Sept. 30, 2025, $11.3 billion worth of authorization remained available.
Though its restructuring strategy is encouraging, it will keep expense base elevated in the near-term. The company’s performance in the upcoming period will depend on consistent delivery, credit discipline, and the durability of capital markets activities.
Given these factors, investors may want to hold off on new purchases until after the upcoming quarterly results, which may provide greater clarity and a potentially more attractive entry point. Existing shareholders, however, may consider maintaining their positions, as Citigroup’s long-term outlook remains constructive despite near-term challenges.
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Citigroup Q4 Earnings on the Deck: How to Approach the Stock Now?
Key Takeaways
Citigroup Inc. (C - Free Report) is slated to report fourth-quarter and full-year 2025 results on Jan. 14, 2026, before market open.
In the first nine months of 2025, Citigroup witnessed increases in net interest income (NII) and non-interest revenues. The company also registered a solid increase in Investment Banking (IB) revenues, driven by a rebound in deal-making activity.
This globally diversified financial services holding company is expected to register bottom and top-line increases in the to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter sales is pegged at $20.94 billion, indicating a 6.9% year-over-year increase. The consensus estimate for earnings for the to-be-reported quarter has been revised downward to $1.65 over the past seven days. The figure indicates a 23.1% rise from the prior-year quarter’s actual.
Estimate Revision Trend
Image Source: Zacks Investment Research
The company also has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 13.19%.
Earnings Surprise History
Image Source: Zacks Investment Research
Factors to Influence Citigroup’s Q4 Results
NII: The Federal Reserve reduced interest rates twice in the fourth quarter, following a 25-basis-point rate cut in September. With this, the Fed funds rate now stands at 3.50-3.75%. This is likely to have supported C’s NII in the fourth quarter, given stabilizing funding/deposit costs.
Management expects NII (excluding Markets) to rise 5.5% on a year-over-year basis. The Zacks Consensus Estimate for NII is pinned at $14.9 billion, suggesting an 8.8% year-over-year rise.
Loans: The overall lending activity was impressive in the fourth quarter. Per the Fed’s latest data, the demand for commercial and industrial and consumer loans was robust in the first two months of the quarter.
Hence, C is expected to have witnessed a decent rise in loan demand, thereby improving the average interest-earning asset balance. The Zacks Consensus Estimate for Citigroup's average interest-earning assets is pegged at $2.5 trillion, indicating an 8.6% increase from the year-ago quarter’s reported figure.
Fee Income: Global mergers and acquisitions (M&As) in the fourth quarter of 2025 surged impressively from the lows witnessed in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. Improved visibility on trade policy, a narrowing of buyer-seller valuation expectations, lower funding costs and a focus on scale and AI integration supported a pickup in deal-making activity. This is likely to have supported C’s IB revenues in the quarter to be reported.
At the 2025 Goldman Sachs U.S. Financial Services Conference, Citigroup’s chief financial officer Mark Mason, stated that the company is seeing continued momentum, particularly in M&A. Management expects IB fees to increase in the mid-20s (percentage) year over year in the fourth quarter.
Further, client activity and market volatility were solid in the fourth quarter. Major factors that impacted the trading business in the quarter included the longest U.S. government shutdown in history, a dip in consumer sentiment, easing monetary policy and a dominant AI theme. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange. Despite this, Citigroup expects market revenues to be down in the low to mid-single digit in the fourth quarter from a year ago. The Zacks Consensus Estimate for market revenues is pegged at $4.5 billion, which suggests a 1.5% decline on a year-over-year basis.
The Zacks Consensus Estimate for income from commissions and fees is pinned at $2.9 billion, which indicates a 14.6% year-over-year rise.
The Zacks Consensus Estimate for income from principal transactions is pegged at $2.1 billion, which suggests an 8% decline from the prior-year quarter’s actual.
The Zacks Consensus Estimate for administration and other fiduciary fees is pinned at $1 billion, which implies a year-over-year decrease of 5%.
The Zacks Consensus Estimate for total non-interest income for the fourth quarter of 2025 is pegged at $5.9 billion, which suggests a 2.4% rise from the prior-year quarter’s actual.
Expenses: Though Citigroup is focused on lowering expenses through organizational simplification, cost reductions, and productivity savings, the bank’s increased investments in business transformation efforts, technological advancements, and higher volume-related expenses are likely to have kept the expense base elevated in the fourth quarter of 2025. This month, Citigroup has obtained the internal approvals to proceed with the planned sale of its Russia-based banking unit, AO Citibank, to Renaissance Capital. The transaction is expected to result in a pre-tax loss of $1.2 billion in the fourth quarter of 2025.
Asset Quality: We expect the company to keep a decent reserve this time, given a slowdown in job growth, which could pressure consumer demand and lead to higher delinquencies.
The Zacks Consensus Estimate for non-accrual loans is pegged at $3.7 billion, indicating a jump of 43.8% from the prior year’s reported figure.
What Our Model Unveils for C
Our proven model does not conclusively predict an earnings beat for Citigroup this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.
Citigroup has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
C’s 2025 Outlook
Citigroup expects revenues to cross $84 billion compared with the prior mentioned $84.1 billion.
NII (excluding Markets) is projected to rise 5.5% on a year-over-year basis compared with the prior stated 4.4% rise.
Management anticipates expenses to be higher than $53.4 billion, including the impacts of FX translation and excluding the goodwill impairment.
The efficiency ratio is expected to be slightly less than 64%.
Branded Cards net credit loss (NCL) is expected to be 3.50-4%.
Retail Services NCL is expected to be 5.75-6.25%.
Citigroup’s Price Performance & Valuation
In the fourth quarter of 2025, C shares gained 19.5% compared with the industry’s rise of 8.1% and the S&P 500 index increase of 4.2%. Shares of its peer Bank of America (BAC - Free Report) grew 9.7% and Wells Fargo (WFC - Free Report) shares rose 17.2% in the same period.
Price Performance
Image Source: Zacks Investment Research
Bank of America and Wells Fargo are scheduled to announce results on Jan. 14.
Now, let us look at the value Citigroup offers investors at current levels.
Currently, C is trading at 11.92X forward 12-month earnings, below the industry’s forward price/earnings (P/E) multiple of 15.35X. The company’s valuation looks inexpensive compared with the industry average.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
Citigroup’s stock is also trading at a discount compared with Bank of America’s P/E of 12.82X and Wells Fargo's P/E of 13.58X.
Evaluating Citigroup Stock Ahead of Q4 Earnings
C is in the middle of a significant transformation aimed at simplifying operations, sharpening its focus on core markets, and boosting profitability. Following the receipt of approval to proceed with the sale of its Russian banking unit this month and the divestiture of a 25% stake in Banamex to a Mexican business leader in December 2025, the company is now preparing for a planned initial public offering of its Mexican consumer, small, and middle-market banking units and the wind-down of its Korean consumer banking operations. These initiatives will free up capital and help the company pursue investments in wealth management and IB operations, which will stoke fee income growth. The company is targeting annual revenue growth of 4-5% through 2026.
As part of its broader efficiency drive, Citigroup launched a two-year cost-cutting initiative in January 2024 to eliminate 20,000 jobs, which is expected to yield $2-$2.5 billion in annual savings by 2026. Further, C is increasingly deploying artificial intelligence (AI) tools to support these efforts.
Citigroup rewards shareholders handsomely. Post-clearing the 2025 Fed stress test, the company hiked its dividend 7.1% to 60 cents per share. In the past five years, it has raised its dividends three times. In January 2025, Citigroup's board of directors approved a $20-billion common stock repurchase program with no expiration date. As of Sept. 30, 2025, $11.3 billion worth of authorization remained available.
Though its restructuring strategy is encouraging, it will keep expense base elevated in the near-term. The company’s performance in the upcoming period will depend on consistent delivery, credit discipline, and the durability of capital markets activities.
Given these factors, investors may want to hold off on new purchases until after the upcoming quarterly results, which may provide greater clarity and a potentially more attractive entry point. Existing shareholders, however, may consider maintaining their positions, as Citigroup’s long-term outlook remains constructive despite near-term challenges.