Banking on a Bit of Luck

One gathers that a certain amount of selling has recently transpired concerning the shares of SoFi Technologies. A dashedly unsettling business, naturally, though one suspects the market is often given to these little fits of pique. Still, while the stock may be experiencing a temporary downturn – a bit of a wobble, as it were – the underlying story remains, shall we say, not entirely devoid of promise. They seem to be acquiring members at a pace that’s… moderate. Which, in the financial world, is often a polite way of saying “not spectacularly rapid,” but it does suggest a trickle of revenue and, if one is optimistic, a slightly more enthusiastic surge in earnings. A perfectly decent showing, all things considered.

One might even venture to suggest holding onto these shares, or perhaps acquiring a few if one hasn’t already done so. However, a truly discerning investor – and yours truly considers himself something of an expert in these matters – always has a backup plan. A second string, if you will. And it is to such a plan that I now turn my attention, for I have stumbled upon another banking concern that appears, at first glance, to be rather more promising. A bit of a dark horse, perhaps, but with a distinctly agreeable air of potential.

An Undervalued Bank, By Jove!

SoFi, for the year concluding at the end of 2025, reported a 37% uptick in revenue, and an even more impressive 111% leap in adjusted net income. Their management, bless their optimistic hearts, anticipates a further 30% revenue boost and a 54% surge in earnings-per-share next year. Sell-side analysts, those oracles of the financial world, foresee continued growth, projecting a 31% EPS increase in 2027, 17.5% in 2028, and a respectable 14% in 2029. All rather encouraging, naturally, but one must always approach such projections with a healthy dose of skepticism. It’s a bit like predicting the weather – one can make an educated guess, but a sudden downpour is always a possibility.

However, the truly interesting development, as I see it, is the case of Citigroup. One finds oneself reminded of the SoFi situation, but with a distinct twist. Citigroup, you see, is not merely a growth stock, but a rather undervalued one. A bargain, if you will. Which, in this day and age, is a most agreeable state of affairs.

Don’t misunderstand me. I’m not suggesting some dreary, forlorn bank stock, languishing in obscurity. Quite the contrary. Citigroup, despite being modestly priced, is very much in the midst of a resurgence. A most unexpected turn of events, to be sure, but one that deserves our attention.

Why Citigroup is a Top Buy-and-Hold, What Ho!

Since late 2023, Citigroup’s shares have been experiencing a rather pleasing upward trajectory. This, one gathers, is largely due to the efforts of their CEO, Jane Fraser, who is undertaking a long-term turnaround of the venerable institution. Through a combination of downsizing and aggressive share repurchases – a most clever tactic, if I may say so – the bank has been steadily improving its operating performance. A bit like a carefully tended garden, blossoming under the watchful eye of a skilled gardener.

In 2024, Citigroup reported a 3% increase in revenue and a rather impressive 38% leap in earnings. And in 2025, excluding a few one-time hiccups, the bank reported a 6.5% revenue boost and a 26.7% surge in earnings. Earnings per share increased by a remarkable 35%, reaching $7.97. Citigroup’s shares have more than doubled during this period, and further upside may well lie ahead. They continue to implement cost-cutting measures, including recently announced plans for layoffs starting in March. A bit drastic, perhaps, but necessary, one suspects. An ongoing consolidation of their retail banking and wealth management divisions could also yield growth and cost synergies. Sell-side analysts anticipate EPS to hit $10.23 in 2026 and $12.03 in 2027. A most agreeable prospect, wouldn’t you agree?

If coupled with a re-rating – a sort of financial makeover, if you will – this could mean a substantial increase in the value of the shares. Currently, Citigroup trades for only 10.8 times forward earnings. Peers like Bank of America and JPMorgan Chase trade at forward multiples of 12 to 14. If shares were to re-rate, the stock could rally by more than 50% between now and 2027. Given this appreciation potential, I believe Citigroup is another top financial stock to buy and hold. A perfectly sound investment, and one that should provide a most agreeable return. A bit of financial sunshine, if you will.

2026-02-20 09:02

An Undervalued Bank, By Jove!

Why Citigroup is a Top Buy-and-Hold, What Ho!

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