Citigroup reports earnings this morning — buy the bank stock before the open or wait for the reaction?
Citigroup reports third-quarter results this morning at 8am ET. The numbers floating around: consensus $2.65 EPS on $23.72B revenue, stock around $130-132 which is about 12% under its 52-week high near $148. UBS just cut its target to $139 while TD Cowen started coverage with a Buy at $150. I do not own any bank stocks and I hate paying full price for anything. Honest question for people who follow earnings: is there ever a good reason for a small investor to buy a single bank stock right into its earnings morning, or is the only sane move to wait for the reaction and the conference call before touching it?
1 answer
- Do not buy at 8:01am — read credit costs on the call instead
Never buy into an earnings morning. Rule one. The people moving the stock at 8:01am have a Bloomberg terminal and a model you do not have, and you are just volunteering to be the liquidity. If you actually want the stock, wait for the 11am call and read two things: credit costs and whether the buyback is still running. A bank that beats on trading revenue but quietly raises its loss provisions is telling you the pretty number is rented. And be honest with yourself: if you would not have bought Citi last Friday, you do not have a thesis, you have FOMO. Write the thesis first, then let the earnings reaction give you a price.