A month has gone by since the last earnings report for Citigroup (C Quick QuoteC - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.

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

Citigroup Q3 Earnings Beat Estimates on Higher NII & Lower Expenses

Citigroup reported third-quarter 2026 earnings per share of $2.85, which surpassed the Zacks Consensus Estimate of $2.66. In the prior-year quarter, the company reported earnings per share of $2.24.

The company’s results benefited from higher net interest income,growth across four core businesses and positive operating leverage. However, higher credit loss provisions and lower fee income acted as offsetting factors. 

Net income in the quarter was $5.25 billion, up 39.8% from the prior-year quarter.

Revenues Increase, Expenses Rise

Revenues, net of interest expenses, were $23.85 billion in the third quarter of 2026, up 7.9% year over year, marking the company's highest third-quarter revenues in a decade. The top line surpassed the Zacks Consensus Estimate of $23.66 billion.

NII increased 13.7% year over year to $16.98 billion, driven by growth in Markets, Services, Wealth and U.S. Consumer Cards.

Non-interest revenues declined 4% year over year to $6.86 billion, primarily due to weakness in Markets and U.S. Consumer Cards.

Citigroup's operating expenses declined 2.4% year over year to $13.95 billion. The decrease mainly reflected the absence of the prior-year Banamex goodwill impairment charge and lower professional services expenses. However, higher transactional and product servicing costs, deposit insurance expenses and compensation partially offset the decline.

The efficiency ratio improved to 58.5% from 64.7% in the year-ago quarter. A decline in the efficiency ratio indicates improvement in profitability.

Segmental Performance

In the Services segment, revenues were $6.61 billion, up 15% year over year. The increase reflected growth in Treasury and Trade Solutions and Securities Services.

The Markets segment’s revenues increased 6% to $6.11 billion, driven by growth in Fixed Income and Equity markets revenues.

Banking revenues increased 6% to $1.74 billion, primarily driven by Investment Banking revenues, which grew 9%. Equity underwriting revenues surged 77%, while Advisory and Debt underwriting revenues declined 4% and 3%, respectively.

In the Wealth segment, revenues were $3.27 billion, climbing 15% 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 remained relatively flat at $4.66 billion. Higher NII was offset by increased partner payment accruals and rewards costs.

In the All Other segment, on a managed basis, revenues declined 3% year over year to $1.43 billion.

Balance Sheet Position Solid

At the end of the third quarter of 2026, Citigroup's deposits increased nearly 1% to $1.51 trillion on a sequential basis. Its loans rose 3.3% from the prior quarter to $819.7 billion, reflecting continued lending activity across its businesses.

Credit Quality: Mixed Bag

Total non-accrual loans decreased 12% year over year to $3.3 billion. Total allowance for credit losses was $22.4 billion at quarter-end, down from $23.8 billion in the prior-year period.

Provisions for credit losses and benefits and claims increased 5.6% year over year to $2.59 billion. This reflected $2.22 billion of net credit losses and a net reserve build of $369 million, primarily driven by changes in the macroeconomic outlook and portfolio growth.

Capital Position Weak

At the end of the reported quarter, Citigroup's Common Equity Tier 1 capital ratio was 12.8%, down from 13.3% in the year-ago quarter. The company’s supplementary leverage ratio in the reported quarter was 5.0%, down from the prior-year quarter’s 5.5%.

Capital Deployment

During the quarter, Citigroup returned approximately $4.1 billion to common shareholders through share repurchases and dividends. 

2026 Outlook

Management now expects NII (excluding Markets) to grow in the mid-to-high 6% range in 2026, up from its previous outlook of growth at the high end of the 5-6% range.

Management now expects the 2026 efficiency ratio to be slightly better than 60%, compared to the previous target of 60%.

Management now expects 2026 ROTCE to be slightly above 11%, exceeding the previous 10-11% target.

U.S. Cards net credit loss (NCL) as a percentage of average loans is now expected to be around 4% in 2026, down from the previous 4–4.5% guidance. 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.

Management aims to scale global prime brokerage balances to more than $700 billion by 2028, up from $450 billion in 2025.

Banking revenues are expected to grow at a low-to-mid-single-digit CAGR, with RoTCE reaching the mid-teens.

Wealth revenues are expected to grow at a low-teens CAGR, with RoTCE targeted at 15-20%.

Services revenues are expected to increase at a low-to-mid-single-digit CAGR.

U.S. Consumer Cards revenues are projected to grow at a mid-single-digit CAGR.

Medium-Term Outlook (2029-2031)

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

Markets ROTCE is targeted at 13% or higher, while Banking ROTCE is expected to reach the mid-to-high teens.

Wealth ROTCE is targeted at more than 20% over the medium term.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Citigroup has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock has a grade 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Citigroup has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.