Citigroup Hits a 52-Week High: Should Investors Bet on the Stock Now?

Citigroup, Inc. C touched a new 52-week high of $99.70 during Friday’s trading session before closing slightly lower at $99.44.

Year to date, shares of Citigroup have jumped 44.3%, outperforming the industry’s growth of 28.9%. It also outpaced its close peers, Bank of America BAC and Wells Fargo’s WFC rises of 17.1% and 17.9%, respectively, over the same time frame.

Price Performance

The recent strength in C’s share price can be attributed to the optimism surrounding the expected Fed rate cut later this month, driven by the signs of softening labor market and other data indicating slowing economic growth. Per the CME Fed watch tool, 94.2% of market participants expect a 25-basis-point rate cut in the upcoming FOMC meeting scheduled for this month.

When the central bank lowered rates last year by 100 basis points, C’s NII benefited from it. In the first half of 2025, Citigroup's net interest income (NII) rose 8% year over year. Further rate cuts should ease pressure on funding and deposit costs, enabling the bank to preserve margins and capitalize on its expanding loan portfolio. This will boost its NII in the upcoming period.

Citigroup’s management raised its 2025 NII guidance (excluding Markets operations) during its second-quarter earnings release. The bank expects NII to grow 4% year over year in 2025, up from the previously mentioned 2-3% rally. In 2024, Citigroup’s NII stood at $54.9 billion.

Given such a positive backdrop and strength in its share price, many investors are contemplating whether to add the Citigroup stock to their portfolios now. Let us delve deeper and analyze other factors at play to assess its investment worthiness.

Citigroup’s Focus on Core Operations Pays Off

C has been focusing on growth in its core businesses by streamlining its overseas operations. In April 2021, the company announced its plan to exit the consumer banking business in 14 markets across Asia and EMEA. 

The company has successfully exited from consumer banking businesses in nine countries. Additionally, as part of its strategy, Citigroup continues to make progress with the wind-down of its Korean consumer banking operations and its overall operations in Russia, as well as preparations for a planned initial public offering of its consumer banking and small business, and middle-market banking operations in Mexico. These initiatives will free up capital, enabling the company to pursue investments in wealth management and investment banking (IB) operations, which will drive fee income growth.

The company’s efforts are already paying off as wealth management revenues registered a 22% year-over-year increase, while IB revenues rose 13% in the first half of 2025.

At the Barclays Global Financial Services Conference, Citigroup’s CFO, Mark Mason, said that the firm is witnessing “good momentum across all of our investment-banking products.” Management expects third-quarter 2025 IB fees and market revenues to increase in the mid-single-digit percentage point on a year-over-year basis. 

The company expects revenues to see a compounded annual rate of 4-5% by the end of 2026.

C’s Business Streamlining Efforts to Reduce Costs

Citigroup has been emphasizing leaner, streamlined operations to reduce expenses. Pursuant to this, the company changed its operating model and the leadership structure. This resulted in a streamlined and straightforward management structure aligned with and supporting the bank's strategy of increased spans of control and significantly reduced bureaucracy and unnecessary complexity. 

In January 2024, C announced plans to cut 20,000 jobs or 8% of its global staff by 2026. The bank had already made significant progress by reducing its headcount by more than 10,000 employees.

The company also continues to focus on streamlining processes and platforms and driving automation to reduce manual touchpoints. Citigroup is increasingly deploying artificial intelligence tools to support these efforts.

In the first half of 2025, the company’s total expenses declined nearly 1% year over year. Management expects expenses of $53.4 billion for 2025, suggesting a slight decline from the $53.9 billion reported in 2024. Also, the company anticipates achieving $2-2.5 billion in annualized run rate savings by 2026.

Citigroup’s Strong Liquidity Aids Capital Distribution

C enjoys a strong liquidity position. As of June 30, 2025, cash and due from banks and total investments aggregated to $474.4 billion, while its total debt (short-term and long-term borrowing) was $373.3 billion.

Citigroup's average Liquidity Coverage Ratio stood at 115% for the quarter ended June 30, 2025. Further, the common equity tier (CET) 1 capital ratio was 13.5% as of the same date. The company’s focus on maintaining a strong capital base supports its capital distribution activities. 

Post-clearing the 2025 Fed stress test, the company hiked its dividend 7.1% to 60 cents per share. In the past five years, it has raised its dividends three times. It has a payout ratio of 33%. It has a dividend yield of 2.41% above the industry average of 1.9%. Its peers, Bank of America and Wells Fargo, have a dividend yield of 2.21%.

Coming back to Citigroup, in January 2025, its board of directors approved a $20-billion common stock repurchase program with no expiration date. As of June 30, 2025, $16.3 billion worth of authorization remained available. Supported by a strong capital and liquidity position, its capital distribution activities seem sustainable.

C’s Estimates & Valuation Analysis

The Zacks Consensus Estimate for Citigroup’s 2025 and 2026 sales implies year-over-year rallies of 4.5% and 2.9%, respectively. The Zacks Consensus Estimate for 2025 and 2026 earnings indicates year-over-year increases of 27.6% and 27.8%, respectively. Estimates for both years have been revised upward over the past 30 days.

Estimates Revision Trend

From a valuation standpoint, C appears inexpensive relative to the industry. It is currently trading at a discount with a forward 12-month price-to-earnings (P/E) of 10.95X, well below the industry average of 14.95X. 

Price-to-Earnings F12M

Meanwhile, Bank of America is trading at a 12-month forward P/E of 12.33X, whereas Wells Fargo is trading at 12.53X. Hence, C is trading at a discount compared with both.

Should You Buy Citigroup’s Stock Now?

C’s strong fundamentals, aggressive cost-cutting, and disciplined strategic refocus position it well for sustained growth. With robust liquidity, rising NII, and expanding wealth and investment banking revenues, the company is executing effectively while returning significant capital through dividends and buybacks.

Despite reaching a 52-week high recently, C still trades at a significant valuation discount to the industry, offering potential upside if management hits growth targets and the Fed starts easing rates.

As such, investors can consider parking their cash in the C stock at the current level to generate a healthy long-term return.

Citigroup currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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