Citigroup CEO: ‘I think there’s tremendous upside in our stock’

on Mar 3, 2022
  • Citigroup says it will take three to five years to hit roughly 12% ROTC.
  • CEO Jane Fraser discussed long-term outlook on CNBC's "Squawk Box".
  • The investment bank is trading fairly below its book value at present.

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It’s been a tough few weeks for Citigroup Inc (NYSE: C), with the stock down nearly 15% in less than a month, but CEO Jane Fraser says, “there’s tremendous upside in our stock.”

Highlights from CEO Fraser’s interview with CNBC

According to the Wall Street bank, it will take three to five years to hit roughly 12% ROTC – a timeline that analysts expect to be a bit too stretched for the investors. On CNBC’s “Squawk Box”, CEO Fraser said:

We’ve taken bold moves in terms of divestures to focus Citi around our core strengths. We’ve taken strategic bets in businesses for growth. But it’s an organic growth strategy and it will take time. I aspire for higher returns and I’m confident we’ll get there in the longer run.

Her remarks come a day after Citi held its investor day that met with a rather underwhelming response from the analysts.

Citigroup is trading below its book value

Fraser agreed that mistakes were made that disabled Citi from achieving most of its targets laid out at its investor day in 2017. But the execution, she pressed, will be better this time.

We have a very credible plan, it’s one that’s grounded; a simpler Citi. We’re focusing on five core businesses to go back to our core competitive strengths and capabilities. We have looked at the different issues that have held us back and we’re addressing them full-on.

At a PE multiple of 5.64, Citi is trading fairly below its book value at present. In its latest reported quarter, the investment bank noted a 26% YoY decline in profit.