Barclays Says The Tide Is Turning For Citigroup

In a report published Friday, Barclays analyst Jason Goldberg previewed Citigroup Inc (NYSE: C)'s upcoming first quarter results, noting the company will demonstrate seasonally strong fee income and lower repositioning costs that will be partially offset by slightly higher expenses and lower NII.

Goldberg estimated Citigroup will earn $1.42 in the quarter, but lowered his 2015 earnings per share estimate to $5.45 from $5.50, reflecting the Fed "pushing out" its expected path of interest rate hikes.

The analyst continued that the "tide is turning" for Citigroup after several issues in 2014 including CCAR objection, Banamex/Chinese port fraud, AML/BSA concerns, large RMBS/CDO/FX settlements and a restructuring in Korea. 2015 is off to a "much better" start at the company was approved for its first dividend increase and meaningful share repurchase since 2006.

Moreover, Citigroup is in the process of exiting consumer businesses in 11 markets along with several institutional businesses. Goldberg noted by exiting these operations, the company will see a "modest" drag on earnings per share. However, these operations are expected to move to Citi Holdings in the first quarter, increasing Citi Holding's assets by around $30 billion.

Shares remain Overweight rated (as a "top pick") with an unchanged $65 price target.