Citigroup Won't Be This Cheap for Long
I have written frequently about why I think the megabank Citigroup (NYSE: C) at the past few months' levels. Over the long term, I expect shares to rise substantially as the bank executes its refresh strategy and corrects its regulatory issues. While I don't know exactly when that will happen, I can say with a certain degree of confidence that when Citigroup reports its third-quarter earnings, there should be even more reason for the stock to move up, particularly in the long term. Here's why.
Most banks are valued in relation to their tangible book value (TBV), which is what a company would be worth if it were immediately liquidated. After years of industry-lagging returns and longstanding regulatory issues, Citigroup's stock and valuation have struggled. After its stock fell into the high $30s early in the pandemic last year, the stock battled back, and in recent days it's traded around $73 per share. But even at this level, Citigroup trades at just 94% of TBV. That's cheap compared to most of Citigroup's peers and the industry in general.
Image source: Citigroup.
Source Fool.com
