New Citi price targets were recently released. Citigroup is one of the largest financial institutions in the world and has analysts who perform in-depth research on stocks. The company’s stock price targets can give investors an idea of what Wall Street thinks about a stock and how much upside or downside an investment might have.
Wall Street analysts often raise their price targets when positive news comes out for stock, whether through earnings reports or otherwise. In this article, I’ll review three stocks for which Citigroup raised its price targets. I’ll explain how the firm operates and give some reasons for the increased price targets.
I based all the current stock price figures and implied upside or downside calculations on closing prices from August 12, 2024. Other data not explicitly cited is from Koyfin or MT Newswires.
The front of a Sweetgreen (SG) store in Arlington, Virginia.
Source: melissamn / Shutterstock.com
The first name on our list of stocks with new Citi price targets is Sweetgreen (NYSE:SG). The research firm raised its target on the stock from $30 to $32. However, compared to the current share price of just over $34, Citi believes Sweetgreen’s stock is fair to slightly overvalued. Sweetgreen is a restaurant chain known for its healthy options, including salads and bowls that use whole foods and locally sourced ingredients.
Sweetgreen operates as a “fast casual” restaurant, similar to Chipotle. A hybrid between a traditional sit-down restaurant and a fast-food restaurant, fast casual establishments don’t have servers or drive-thrus. They often claim to have higher quality ingredients than fast food and cost less than a sit-down restaurant.
This combination of affordability and quality has made this business model popular recently. The industry grew by 11.2% in 2023, substantially faster than other restaurant business models. Indeed, Sweetgreen is also growing quickly, nearly tripling its revenues from the end of 2021 to the second quarter of 2024.
The increased price target was likely due to Sweetgreen beating analysts’ estimates on revenue in Q2 and raising its full-year revenue guidance. The company has also seen promising results using salad-making robots. Using robots, locations saw 10% higher average ticket prices, which could lead to higher margins.
YETI (YETI)
Several thermoses with the Yeti logo on them
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The next company on our list of stocks with new Citi price targets is YETI (NYSE:YETI). Citi raised its price target for Yeti from $47 to $50. Yeti’s stock price currently sits at just under $40. The new price target implies an upside of 26%.
YETI makes high-quality hard- and soft-shell coolers and thermoses. They are famous for maintaining hot or cold temperatures for an extended period and are largely marketed to people engaging in outdoor activities.
YETI is growing considerably slower than Sweetgreen, increasing revenues by 25% since the end of 2021. However, unlike Sweetgreen, the company has been profitable for years and has had a net income of $188 million over the last twelve months.
Citi wasn’t the only analyst to raise its price target after the firm’s recent earnings release; at least three others did as well. This was likely because of several developments in the earnings release. First, the firm beat adjusted earnings per share estimates by over 10%. Next, the company raised its full-year adjusted net income guidance growth by 1.5%. Additionally, YETI’s gross margin grew significantly, expanding 360 basis points.
Expedia (EXPE)
Expedia app logo on a smartphone screen. EXPE stock
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The last name on our list of new Citi price targets is Expedia (NASDAQ:EXPE). Citi increased its price target on the vacation booking platform from $140 to $145. Compared to the current price of nearly $127, this new target implies an upside of 14%.
Expedia is an online travel agency where users can plan and book flights, hotels and rental cars all in one place. COVID-19 hit Expedia hard, as its annual revenues didn’t exceed pre-pandemic levels again until 2023.
At least 12 Wall Street analysts altered their price targets after the firm’s August 8th earnings release. Seven analysts raised their targets, while five lowered them.
The positive news from the earnings release included beating adjusted EPS estimates by 11% and revenue coming in $30 million higher than expected. However, it did issue lower-than-expected full-year guidance, with gross bookings growing by only 4%. The firm noted in its earnings call that it sees “a more challenging macro environment and a slowdown in travel demand” for the rest of the year.
On the date of publication, Leo Miller did not hold (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Leo Miller has been studying financial markets since his junior year of college. While he loves learning about investments to fuel his intellectual curiosity, he is particularly fond of helping others grow their understanding of complex financial topics. His areas of expertise include public equity and investment fund analysis. He has work experience investing in public and private markets, impact investments, and performing macroeconomic research.
