Citigroup offers cheap value with Banamex catalyst
The bull case presented for Citigroup is that it remains highly inexpensive, trading near book value with a clear catalyst in the upcoming IPO of its Mexican subsidiary, Banamex.
The argument
The guest argued that CEO Jane Fraser has successfully improved profitability, and spinning off the Mexican unit represents the final piece of the restructuring puzzle.
The thesis, stress-tested
✓ What validates it
- ✓Formal filing and execution of the Banamex IPO
- ✓Continued improvement in return on equity (ROE) and profitability metrics
▸ Risks discussed
- ▸Delays in the Banamex IPO timeline
- ▸Macroeconomic headwinds in emerging markets affecting the spin-off valuation
Hear it yourself
"They've got this Banamex c, IPO coming up, later this year. That's the Mexican subsidiary. That's the Mexican subsidiary. It's the final piece of the puzzle to get To spin it out."
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