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Citigroup Getting High Praise, but Prematurely

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Shares of banking giant Citigroup (C) are down $0.61, or 1.36% to $44.62 despite the company having received some praise earlier today from Goldman Sachs (GS), which said that Citigroup and JPMorgan (JPM) are better buys than Bank of America (BAC). Goldman Sachs, which has a “Conviction Buy” rating on Citigroup, also increased its price target by $1 to $56 per share.

 

Given that the stock is currently trading at $44.62, Goldman Sachs believes that Citi can appreciate by 20% from here. The analyst believes that Citi is better positioned from a risk/reward standpoint than BofA. I'm not sure I agree, completely. While Citi has certainly improved from last year, this premium will be based heavily upon what the company reports in its first quarter results, which is due out (tentatively) on April 15.

 

Beside, Citi is not coming off an excellent fourth-quarter report, either,  even if very little was expected. This time, however, the company will have to show more improvement, especially after missing both top and bottom line estimates.

 

Still, management deserved credit that profits soared 25% amid such a tumultuous year. For now, however, I think shares of Citi will be in a holding pattern until Q1 numbers come out. But its nonetheless encouraging that the company is getting high praise from some prominent analysts -- albeit prematurely.

 

Disclosure: At the time of publication, Richard held no positions in the companies mentioned.

 

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