Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC): Banking On, Well, Banking

Page 1 of 2

Citigroup Inc (NYSE:C)One of the great turnaround stories that’s still taking shape is Citigroup Inc. (NYSE:C). With all the talk surrounding the mixed results of the housing market and the auto industry in full-fledged rebound mode, much of the spotlight has been taken off the financials. I plan to re-aim this spotlight.

Before the financial crisis, Citigroup Inc. (NYSE:C) traded at a premium to both JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) on a price-to-book basis; now the company trades at a steep discount to JPMorgan Chase & Co. (NYSE:JPM) and inline with Bank of America Corp (NYSE:BAC).



I think Citigroup Inc. (NYSE:C) is still in full turnaround mode and presents investors the best upside of all the major banks. The bank should trade more inline with JPMorgan and other top banks over the long term.

JPMorgan Chase & Co. (NYSE:JPM) is one of the top-three banks by assets. In March, the Fed approved the company’s capital deployment plan. JPMorgan now has a $6 billion stock- repurchase program in place.

JPMorgan Chase & Co. (NYSE:JPM) is also slashing jobs to boost profitability. The bank will eliminate 19,000 jobs by the end of 2014. With the help of job cuts, the bank is calling for net income of $27.5 billion in 2014.

Revenue is expected to be up 2% in 2013, after flat revenue growth in 2012. The top line is expected to be weak due to lower trading revenue. Earlier this month, the bank posted 2Q EPS of $1.60 versus $1.21 for the same period last year. Yet, total loans remained flat year-over-year, with the net interest margin falling. So, the bank is still seeing modest growth, but not enough to justify a premium to Citi.

The mortgage bank

Wells Fargo & Co (NYSE:WFC) is still the U.S.’ leading bank for mortgages. The company got a nice uptick in earnings and loan volume related to mortgage refinancing, but as this market cools, so should Wells Fargo.

Wells Fargo & Co (NYSE:WFC) has a target return on assets of 1.3% to 1.6% and return on equity of 12% to 15%. As well, the bank is looking to international markets to help boost its business model, specifically in the asset management sector.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!