A month has gone by since the last earnings report for Citigroup (C Quick QuoteC - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Citigroup due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Citigroup Q2 Earnings Beat Estimates on Higher NII & Fee Income

Citigroup reported second-quarter 2026 earnings per share of $3.15, which surpassed the Zacks Consensus Estimate of $2.72. In the prior-year quarter, the company reported earnings per share of $1.96. 

The company’s results benefited from a year-over-year rise in NII and growth across each of its five core businesses. Citigroup also registered a year-over-year increase of 44% in investment banking revenues and positive operating leverage. However, higher operating expenses and a weaker capital position acted as offsetting factors. 

Net income in the quarter was $5.8 billion, up 45.1% from the prior-year quarter.

Revenues Increase, Expenses Rise

Revenues, net of interest expenses, were $24.8 billion in the second quarter of 2026, up 14.3% year over year. The top line surpassed the Zacks Consensus Estimate by 4.6%. 

NII rose 12.8% year over year to $17.1 billion, while non-interest revenues increased 17.7% to $7.6 billion. 

Citigroup’s operating expenses increased 4.7% year over year to $14.2 billion. The rise was driven by higher compensation and benefits, transactional and product servicing expenses, deposit insurance costs and the impact of foreign exchange translation, partly offset by lower professional services expenses.

Segmental Performance

In the Services segment, total revenues, net of interest expenses, were $6.4 billion, up 17.5% year over year. The increase reflected growth in Treasury and Trade Solutions and Securities Services.

The Markets segment’s revenues increased 17.2% year over year to $7 billion, driven by growth in Fixed Income and Equity markets revenues. 

Banking revenues were $1.9 billion, up 34% year over year, primarily driven by a rise in Investment Banking revenues. Debt Capital Markets revenues rose 65% and Equity Capital Markets revenues surged 92%, while Advisory revenues declined 4%. 

In the Wealth segment, revenues were $3.2 billion, rising 12.9% year over year. The increase was driven by growth across Citigold and Retail Banking, the Private Bank and Wealth at Work. 

U.S. Consumer Cards revenues were $4.5 billion, up 1.1% year over year, driven by higher NII on increased interest-earning balances, largely offset by lower non-interest revenues. 

In the All Other segment, on a managed basis, revenues were $1.7 billion, up 1.2% year over year.

Balance Sheet Position Solid

At the end of the second quarter of 2026, the company’s deposits rose 3.2% from the prior quarter to $1.49 trillion. Its loans also increased 4.2% on a sequential basis to $793.6 billion.

Credit Quality

Total non-accrual loans decreased 3.7% year over year to $3.2 billion. Total allowance for credit losses was $22.2 billion at the quarter-end, down from $23.7 billion in the prior-year period. 

Provisions for credit losses and benefits, and claims were $2.5 billion in the quarter, down 12.2% year over year.

Capital Position Weak

At the end of the second quarter of 2026, Citigroup’s Common Equity Tier 1 capital ratio was 12.8%, down from 13.5% in the second quarter of 2025. The company’s supplementary leverage ratio in the reported quarter was 5.2%, down from the prior-year quarter’s 5.5%.

Capital Deployment

During the quarter, Citigroup returned nearly $5 billion to common shareholders through share repurchases and dividends.

2026 Outlook

Management expects NII (excluding Markets) to increase 5-6% on a year-over-year basis in 2026.

Management anticipates an efficiency ratio of 60% in 2026, with another year of positive operating leverage.

Management continues to target a return on tangible common equity (RoTCE) of 10-11% in 2026.

U.S Cards net credit loss (NCL) as a percentage of average loans is expected to be 4-4.5%. In 2025, U.S. Cards NCL was 4.1%.

The company also plans to continue share repurchases under its $30-billion authorization, with 2026 buybacks expected to exceed the 2025 level.

Near-Term Outlook (2027-2028)

Citigroup expects revenues, excluding Legacy Franchises and reconciling items, to see a mid-single-digit CAGR from 2025 through 2028. 

The efficiency ratio is targeted at 55-60%, excluding notable items, while RoTCE is expected to be within 11-13% in both 2027 and 2028, moving toward the upper end of the range in 2028.

Medium-Term Outlook (2029-2031)

Citigroup targets an efficiency ratio of below 55% and RoTCE of 14-15% over the medium term.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Citigroup has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise Citigroup has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.