In December, Citigroup announced that it would lay off 4% of its workforce as it continues to focus on expenses in a lackluster revenue environment.
Potential catalysts for Citi in the near term include "additional organizational/management changes as well as our expectations for a more favorable CCAR review and more important, validation from the Fed of the progress made over the last few years and months, including the expected announcement of increasing capital redeployment for 2013," he wrote.
At the current price of $41.25, the stock trades at 8-9 times 2013 earnings, making it the "cheapest broker" ending 2012. Hagerman has a 12-month price target of $50 for Citi, implying a 21% upside to the stock.
-- Written by Shanthi Bharatwaj in New York.
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