Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Citi earns an upgrade following Q2 earnings

Published 19/07/2023, 07:02 am
© Reuters.
C
-

Odeon Capital upgraded Citigroup Inc (NYSE:C) to Buy from Hold with a price target of $50.51 following the company’s quarterly earnings report last week.

Citi announced a decrease in profits during Q2 due to a slowdown in dealmaking affecting its investment banking unit. However, the bank's personal banking business provided some positive momentum, balancing out the decline.

According to Odeon Capital, the bank performed poorly in trading fixed income, rates, currencies, and equities compared to the previous year. However, the firm believes this negative trend is not expected to persist due to the stabilization of the markets and increased volatility of the dollar.

Every aspect of investment banking did unusually poorly, largely influenced by the weakness in the overall markets. However, Odeon mentioned that since June, there has been a positive shift in these markets, and this positive trend is anticipated to continue for several quarters.

Odeon anticipates that the capital markets businesses are transitioning from a high-stress phase to a phase of steady growth. Furthermore, it is expected that interest rates will remain elevated. In such a scenario, Citigroup's earnings are predicted to rebound strongly over the next two quarters.

“The main challenge the bank faces will be credit card losses and a slowdown in that business. Netting the whole, it is quite likely that bank earnings will recover meaningfully from the devastation to parts of its business this quarter,” added Odeon.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.