Citigroup faces declining profits, rising credit losses, and regulatory concerns, leading to a 5% stock decline.

From Nasdaq: 2024-10-16 09:16:00

Citigroup Inc. (NYSE: C) releases quarterly earnings results, leading to a 5% stock decline due to industry metrics and regulatory speculations. Credit losses and delinquency rates are on the rise, affecting consumer discretionary stocks like Nike Inc. (NYSE: NKE) and Lululemon Athletica Inc. (NASDAQ: LULU). 90-day delinquencies for Citigroup cards rise to 1.5%.

Investors are concerned about Citigroup’s declining profits and return on tangible common equity (ROTCE) of 7%, much lower than industry peers. Bank of America reports a ROTCE of 12.8%, raising doubts about Citigroup’s capital investments. Short interest in Citigroup rises to over $2.2 billion, leading to bearish sentiment and potential downside.

Citigroup’s 18.5x P/E ratio is a significant discount compared to the finance sector’s average of 49.5x, hinting at lower growth expectations. Markets discount Citigroup’s stock based on profitability metrics and price action compared to peers. Citigroup faces challenges in profitability and growth, leading to potential further downside for the stock.



Read more at Nasdaq:: Citigroup Faces Growing Troubles: Could the Industry Be at Risk?