Citigroup Plunges 6.57% on Earnings Downgrade

On April 7, 2025, Citigroup's stock experienced a significant drop of 6.57% in pre-market trading, reflecting a notable decline in investor sentiment.

Citigroup's stock price decline can be attributed to a downgrade by an analyst. The analyst cited concerns over the company's earnings outlook, which fell short of expectations. Despite management's goal of achieving double-digit growth in third-party sales this year, driven by enterprise business, overseas markets, and new product launches in the convenience food sector, adverse weather conditions delayed the start of the crayfish season, resulting in flat first-quarter sales. The analyst also noted that unfavorable sales mix changes and price competition would put pressure on the gross margin of the third-party business. Consequently, the analyst lowered their earnings forecasts for the current and next year by 16% and 19%, respectively, and reduced the target price from 16.4 HKD to 13.7 HKD.

Additionally, Citigroup expressed skepticism about the feasibility of a joint venture between TSMC and another company, citing significant differences in manufacturing and operations. The bank suggested that TSMC should consider exiting the chip foundry business and focus on its core CPU operations.