Tuesday's IBD 50 Stocks To Watch pick and banking giant Citigroup is breaking out today past a new buy point after testing that entry in recent days. That makes Citigroup stock one of the best to watch right now in today's stock market, but the company's second-quarter earnings report looms Friday.
On April 12, Citigroup reported a 28% decrease in earnings to $1.58 per share. Revenue rose 17% year-over-year to $43.8 billion. Citi repurchased $500 million worth of shares in the first quarter and said it will continue to evaluate buybacks on a quarterly basis.
In late June, Citi announced that it had completed the Federal Reserve Board's 2024 annual supervisory stress test process. Additionally, the company said it plans to increase its quarterly stock dividend from 53 cents to 56 cents a share, subject to quarterly approval by Citi's board of directors, starting in the third quarter of 2024. Citi will continue to assess share repurchases on a quarter-to-quarter basis.
For its upcoming second-quarter report, Citigroup earnings are expected to rise 5% year over year to $1.39 per share, according to IBD MarketSurge. Citigroup earnings are expected to ease 5% in 2024 before rising 26% in 2025.
Be sure to read how to adjust to changing market conditions, with IBD's new exposure levels.
Citigroup Stock Tests Buy Point
In recent sessions, Citigroup stock attempted to clear a 64.98 buy point in a flat base, according to MarketSurge pattern recognition. Shares rallied nearly 3% midday Tuesday, breaking out past their latest entry. The 5% buy area will go up to 68.23. Keep in mind that there is extra risk due to Friday's earnings report.
Still, with IBD's recommended equity exposure range at 80%-100%, investors should still be looking to buy breakouts among top-rated stocks.
Citigroup stock shows a modest 83 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup, mainly due to lackluster earnings growth. The stock carries a weak 30 Earnings Per Share Rating out of a best-possible 99. Conversely, the stock has logged strong price gains since November 2023.
The relative strength line is recovering after a steep decline in May and into June. It's still far from its old highs, which is a key flaw as the stock flirts with new highs. Look for resurgent strength in the RS line to indicate confirmation of stock market leadership.
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Best Stocks To Watch
Three IBD 50 Growth Stocks To Watch picks from earlier this year are among the best stocks to watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Hilton | 215.79 | Flat base | |
| Booz Allen Hamilton | 164.43 | Flat base | |
| Palantir Technologies | 26.57 | Cup with handle |
Source: IBD Data As Of July 3, 2024
Follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
