Which Way Is Citigroup Heading?

With shares of Citigroup (NYSE:C) trading at around $41.17, is C an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Citigroup is getting hit today due earnings coming in below expectations. Q4 EPS came in at $.038; $0.69 excluding CVA/DVA1 and repositioning charges. There was more than $2 billion in charges related to layoffs and lawsuits. Citigroup sees legal charges elevated, but the company doesn’t expect this to be a long-term trend. Net income increased to $1.2 billion compared to $956 million in the same quarter last year.

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Net interest margin for Q4 was 2.93 percent. This might not be spectacular compared to others in the industry, but net interest margin is expected to remain at the same level throughout 2013. More potentially good news: credit trends remain stable at favorable levels, drivers for transaction services have momentum, total loans are up 7 percent, and the Treasury will hire Citigroup to sell General Motors Company (NYSE:GM) shares. It’s always nice when friends stick together. Citigroup will also ask regulators for a limited buyback. Odds are good. It should also be noted that for FY 2013, Citigroup sees Asia revenue growth at 4 percent to 6 percent.

Now let’s take a look at some important numbers for Citigroup.