Citigroup's Stock Surges, But High Valuations Raise Concerns
Citigroup, the global banking giant, has seen a significant rise in its stock price and return on equity. However, investors might want to hold off on immediate purchases of Citigroup stock today, according to financial experts.
Citigroup's return on equity has surged from 6.3% in Q2 2024 to 7.7% in Q2 2025. This improvement comes alongside an 8% increase in revenues year over year and earnings per share rising to $1.96 from $1.52. Despite these positives, the stock price has appreciated by roughly 50% over the past 52 weeks, outpacing the S&P 500's gain by more than threefold.
The increased stock price has pushed Citigroup's valuation ratios above their five-year averages. Its price-to-book ratio stands at around 0.9x, 50% higher than the usual average of 0.6x. Similarly, the forward P/E ratio is around 9.8x, higher than the five-year average of 8.5x. These metrics suggest that Citigroup's stock may be expensive at current levels.
Benjamin Graham, the father of fundamental analysis, advised against overpaying for a great business, as it can turn a good investment into a bad one. Given Citigroup's strong performance and high valuations, investors might want to heed this advice and keep watching the stock market today before making a decision.
Citigroup's impressive financial performance has driven its stock price up, but high valuation ratios suggest it might be overpriced. Investors should consider Benjamin Graham's advice and monitor the stock market today before committing to a purchase.
