Citi Detractors Roar

"For Citi to re-establish an average tangible capital ratio of over 4.25%, Citi will need to raise over $30 billion of equity," she writes. "To do that Citi could cut its dividend, raise capital, sell assets, or a combination thereof. ... We believe such a catalyst will pressure the stock."

Two weeks ago, Citi reported a 57% drop in third-quarter profit to $2.38 billion, or 47 cents a share. It took more than $3 billion in writedowns in the third quarter on its exposure to leveraged loan commitments, subprime mortgages and fixed-income trading. Citi's total credit costs jumped by $3 billion, as the bank recognized $780 million in credit losses and took a net charge of $2.24 billion to increase loan-loss reserves.

Credit Suisse also downgraded Citi to a neutral rating on Thursday.

Citi acknowledged in their latest earnings call that certain capital ratio levels were indeed lower, reflecting recent acquisitions and asset growth, but management said it expected capital levels to return to more normal levels next year.

Whitney said in a follow-up interview with TheStreet.com that it was likely that Citi would have to cut its dividend and sell assets at the same time.

"They have to [cut the dividend] as the payout ratio exceeds 50%," Whitney said. Citi's earnings outlook "is not strong enough to support dividend. They have to do this."