Citigroup Earnings: Undervalued Citi Keeps Revenue Intact, and Our Thesis Is Unchanged

No-moat-rated Citigroup was our top pick at the start of 2022 and remains one of the more undervalued banks under our coverage in 2023. First-quarter results supported our multistep thesis for the name as the overall revenue and expense outlooks remained unchanged, the bank sold off additional business units, and first-quarter results were even better than we expected. Going into the quarter, we felt that the largest banks would be fine. While profitability would face some pressure in the short term, in the longer term it would not be destroyed. With no major disappointments, and with the bank seeming to handle the current turmoil just fine, we do not plan on making a material change to our fair value estimate of $75, barring any surprises on the upcoming earnings call. We continue to view Citigroup as an undervalued stock with idiosyncratic catalysts that could help unlock value over the next several years.