The United States is a consumer-driven economy. And that is what’s making things particularly difficult for bank stock Citigroup (NYSE:C) right now. Citigroup just released data about the state of credit card delinquency rates in the U.S., and the news was sufficient to send Citigroup down significantly in Monday afternoon’s trading.
Citigroup reported that both its credit card delinquency rates and its charge-off rates rose in September. While lending activity didn’t shift much one way or the other, delinquencies were up to 1.33% from the 1.28% seen in August. The news wasn’t all bad there, as the high-water mark for delinquencies remains September 2019, which saw 1.52%. Meanwhile, credit loss also increased, going from 1.97% to 2.13%. Again, that was still below the September 2019 high of 2.61%.
That by itself doesn’t sound so bad, but a look at credit card statistics as a whole suggests something is up. Clever Real Estate, which engaged in a study of credit cards in America, discovered that around 61% of Americans have some degree of credit card debt. Not so bad by itself, but it gets worse. The average debt owed is around $5,875, and 23% of respondents noted that the number gets bigger every month. With 14% of respondents noting that they’ve missed at least one payment in 2023, Citigroup may see that September 2019 record broken before too much longer. Since Citigroup is already planning major layoffs to come, that may be at least part of the reason why.
Is Citigroup a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on C stock based on eight Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average C price target of $51.06 per share implies 25.06% upside potential.
