He downgraded Citigroup despite the company's progress in improving efficiency and reducing the drag on earnings of its Citi Holdings runoff subsidiary, because of the stock's significant recovery. With "less 'low hanging fruit' to improve returns from here, we believe current valuation more accurately reflects Citi's core earnings power," he wrote.
The following chart shows the year-to-date performance of Citigroup and U.S. Bancorp shares relative to the KBW Bank Index.
data by YCharts
-- Written by Philip van Doorn in Jupiter, Fla.