Citigroup has emerged as one of the more compelling turnaround stories in the banking sector. Recent earnings highlighted strong revenue growth and improving profitability. Management’s disciplined cost controls and productivity savings are beginning to take hold, while returning over $3 billion to shareholders in buybacks and dividends last quarter. With improving return on tangible common equity (RoTCE) and an above-peer dividend yield, Citi’s strategic transformation and discounted valuation position it as an attractive candidate for investors seeking both growth and income. Trade timing & outlook C closed above $100, breaking out of its consolidation range near $97 with strong volume confirmation. Relative strength vs. the Financials ETF (XLF) has turned higher, reinforcing outperformance against sector peers. The breakout follows a multimonth uptrend, with higher highs and higher lows indicating sustained buying interest. Fundamentals Citigroup’s Q2 2025 results showcased meaningful progress in its turnaround strategy, delivering growth across revenue, net income, and return on equity. The bank continues to trade at a discount relative to peers, yet management’s capital efficiency, and return on equity improvements point toward closing this gap. RoTCE: 8.7% in Q2, with guidance for 10%–11% in 2026 CET1 capital ratio: ~13.5%, providing robust balance sheet strength Relative to the industry averages PB ratio: 0.93x vs. 1.36x Expected EPS growth: 23.2% vs. 11.5% Net margins: 17.1% vs. 26.9% Bullish thesis Earnings growth momentum: Citigroup is showing tangible revenue and earnings growth across core business lines, positioning it for higher profitability. Improving returns: RoTCE is rising toward management’s 10%–11% target, suggesting Citi will soon earn above its cost of capital. Capital returns: Share repurchases and dividend growth (2.3% yield) add shareholder value, with Citi returning $3.1 billion in Q2 alone. Global & diversified growth: Citi’s transformation strategy focuses on high-return businesses such as markets, wealth management, and U.S. personal banking, supported by a global footprint that benefits from cross-border flows. Options trade With an IV rank of 21%, options are starting to get more expensive, making long call spreads an attractive way to position for upside. I’m buying the Oct $100/$110 call vertical @ $3.39 Debit. This entails: Buying the Oct $100 Call @ $4.25 Selling the Oct $110 Call @ $0.86 Maximum Reward: $661 per contract if C is above $110 at expiration Maximum Risk: $339 per contract if C is below $100 at expiration Breakeven: $103.39 View this Trade with Updated Pricing at OptionsPlay DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
