Forget pricey JPMorgan: Is this turnaround bank the better rebound bet?

Investors are comparing banks with the Federal Reserve holding off on rate cuts until June 2027. Citigroup (C) has gained 29.6% over the period and trades at 11.4 times earnings, lower than JPMorgan Chase (JPM) at 14 times and Bank of America (BAC). Citigroup's latest quarter showed earnings per share of $2.85, beating estimates by 7.5%, revenue rising 8% with the strongest revenue growth in a decade, and return on tangible common equity reaching 11.5%, a 180 basis point increase.

Management has raised its full-year ROTCE target to above 11%, with most growth from key units. The efficiency ratio improved to 58.5% from 64.7%, and $1 billion of severance was booked this year. However, consumer card revenue remained flat, and shares fell 3.48% premarket trading. Citigroup's forward multiple is below 10 times, with a PEG ratio of 0.26 compared to Bank of America's 0.75.

The stock is at approximately 1.2 times tangible book value, and the company has repurchased $13.3 billion of stock and raised its dividend for four straight years. Analyst price targets range, with a median at $150.71. The bank's valuation relies on tangible book value, progress on simplification costs, and growth in its corporate Services business.

ProPicks AI, an AI-driven stock-picking service, added Citigroup to its Beat the S&P 500 strategy for November, alongside a high-margin biopharma company and a jet-turbine maker. Citigroup's turnaround is showing promise with climbing returns, and the shares trade near 11 times earnings while management targets ROTCE of 11% to 13% in 2027 and 2028.

A $30 billion buyback program and a potential Banamex IPO could provide more capital for repurchases.