Citigroup’s stock, while having experienced its share of ups and downs, has remained relatively stagnant over the past five years, a stark contrast to the broader market’s surge. The recent fourth-quarter results revealed a $1.8 billion loss attributed to various charges related to overseas risks. However, amid the lackluster performance, there are signs of optimism. Management’s outlook, anticipating a 4% increase in revenue for 2024, and the commitment to substantial expense reductions have garnered positive reactions from investors and analysts.
Despite the challenging period, analysts such as Wells Fargo’s Mike Mayo and Bank of America see Citigroup as a compelling investment. Several prominent value investors, including Warren Buffett’s Berkshire Hathaway and Greenhaven Associates, have increased their positions, expressing confidence in Citigroup’s management and its turnaround strategy. Notably, the stock’s ultra-low price-to-book value ratio, trading at just 0.56 times book value, presents an attractive proposition for investors, indicating substantial potential upside. Additionally, Citigroup’s solid dividend yield of 3.9%, higher than its big four banking peers, adds to its appeal as a solid dividend play. While the bank faces challenges, its current valuation, dividend yield, and the confidence of key investors suggest a potential turnaround in the making.