Citigroup: Financial Loser

NEW YORK (TheStreet) -- Citigroup (C) was the loser among the largest U.S. financial names on Monday, with shares sliding 5% to close at $26.48.

The broad indexes all declined significantly, pulling back from initial gains after eurozone finance ministers agreed to provide up to 100 billion euro ($125 billion) in bailout assistance for Spain's beleaguered banks, with Spain expected to make a formal request after June 21, when two audits of Spain's banking system are due to be completed.

Investors' flight to safety resumed, with 10-year U.S. Treasury bond yields declining four basis points to 1.60%, while the yield on Spain's 10-year paper increased 30 basis points to 6.46, and Italy's 10-year treasury bonds saw yields increase by 26 basis points to 6.00%.

Banks led the market lower, with the KBW Bank Index (I:BKX) declining over 2% to close at 42.61, with all 24 index components seeing declines for the session, except for State Street, with shares rising 1.5% to close at $42.79.

Citigroup's shares have now risen 1% year-to-date, after falling 44% during 2011.

The shares trade just over half their reported March 31 tangible book value of $50.90, and less than six times the consensus 2013 earnings estimate of $4.62, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $4.11.

JPMorgan analyst Vivek Juneja on Monday reiterated his neutral rating on Citigroup, following Citi's announcement on Friday that it had re-submitted its 2012 capital plan to the Federal Reserve, with no increased return of capital to investors through dividend increases or share buybacks planned for this year.

The analyst said that "Citi's decision to wait to ask for increased capital return until 2013 would bolster its chances of approval and management had indicated this was a potential plan," and that "further weakening in Europe and some slowdown in Asia, higher market volatility and increased regulatory scrutiny of banks may have driven this decision," adding that "Citi likely did not want to risk a second rejection by the Fed for what would likely be a modestly higher capital return."

Juneja said "we think Citi's stock is attractively valued at 0.5x tangible book value, but the weakening global outlook could limit recovery relatively more so than peers."

Interested in more on Citigroup? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.