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Citigroup (C - Get Report) closed at $34.25 Wednesday, returning 30% year-to-date.
O'Connor's price target for Citi is $36.00.
The analyst calls Citigroup "the only US bank with a meaningful presence in emerging markets (EM) in each core segment," with "total non-US revenue was over 50% of revenue at C overall."
"This is a positive," says O'Connor, "if one assumes growth in the US and developed markets in general will lag EM growth," but then again, "C is seen as more susceptible to concerns over a global slowdown and Euro zone issues (even though its exposure isn't much larger than peers BAC/JPM)."
O'Connor estimates that Citigroup will earn $3.79 a share in 2012, followed by EPS of $4.88 in 2013.
Citigroup's capital is growing, and O'Connor estimates the company will achieve a Basel III Tier 1 common equity ratio of 8.8% by the end of 2012, and that "beyond 2012, we think excess capital could build meaningfully."
The analyst also points out that Citigroup trades at a similar discount to book value as Bank of America, -- the shares of both companies traded for 0.7 times tangible book value at Tuesday's close, according to HighlineFI -- "despite higher capital and lower risk."
On the negative side, O'Connor says that Citi is "too reliant on capital markets," and that the company "has less expense flexibility in the investment bank, given recent investment spend and ongoing required investments in technology." The analyst also says that with "more moving pieces than other U.S. banks," the company is "a bit more difficult to analyze and compare vs. US peers."
Interested in more on Citigroup? See TheStreet Ratings' report card for this stock.