Polini lowered his rating for Citigroup (C) to "Outperform" from "Strong Buy," while drastically cutting his 12-month price target for the shares to $35 from $48, and lowering his 2012 earnings estimate to $4.08 from $4.20, and his 2013 EPS estimate to $4.42 from $4.88.
Citigroup's shares closed at $25.75 Tuesday, down 6% year-to-date, after dropping 44% during 2011. The shares trade for just over half their tangible book value, according to Thomson Reuters Bank Insight, and for less than six times the consensus 2013 earnings estimate of $4.64 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $4.09.
Polini said that "persistent global economic concerns could negatively impact C's relative price performance over the near term," and that his new price target assumed the company would trade "at about 8.0x 2013E EPS of $4.42 or at a discount to our industry average (comprised of the nation's 40 largest banks) of 10.4x," with the discount "warranted given the weak domestic economic recovery and the company's relatively high international exposure."Interested in more on Citigroup? See TheStreet Ratings' report card for this stock.
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