5 Most Undervalued Bank Stocks To Buy According To Hedge Funds

3. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 85

P/E Ratio as of January 20: 6.94

Citigroup Inc. (NYSE:C) is an American multinational investment bank and financial services corporation that serves individuals, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. Citigroup Inc. (NYSE:C) is one of the most undervalued stocks to buy according to hedge funds. 

On January 13, Citigroup Inc. (NYSE:C) reported Q4 non-GAAP earnings per share of $1.10, missing market estimates by $0.10. The revenue came in at $18 billion, topping Wall Street consensus by $30 million. Citigroup Inc. (NYSE:C) declared on January 12 a $0.51 per share quarterly dividend, in line with previous. The dividend is distributable on February 24, to shareholders of record on February 6. 

BofA analyst Ebrahim Poonawala on January 17 raised the price target for Citigroup Inc. (NYSE:C) to $60 from $52 and maintained a Buy rating on the shares. He praised management for navigating a period of extraordinary volatility while building capital, executing on consumer business exits, and mostly staying on track with executing on its strategic plan laid out last February. The analyst also sees potential catalysts, such as the sale of its Mexico retail bank Banamex and an event-free 2023 CCAR stress test, that could reinvigorate interest in the stock.

According to Insider Monkey’s data, Warren Buffett’s Berkshire Hathaway held the largest stake in Citigroup Inc. (NYSE:C) as of the end of September 2022, with more than 55 million shares worth $2.3 billion. 

In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:

“Shares of Citigroup Inc. (NYSE:C) declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”