Citigroup: Financial Winners & Losers
(Citigroup and other stock prices brought current in this update.)
NEW YORK (
) --
Citigroup
(C) - Get Citigroup Inc. Report
was among the winners of the financial sector Monday after an analyst said the bank's book value may be understated.
rose after Rochdale Securities analyst Dick Bove wrote in a research note Thursday that the initial public offering of
Primerica
(PRI) - Get Primerica, Inc. Report
provides multiple benefits, including an expected $369 million in cash and the fact that Citigroup will have divested itself of another $5 billion in assets.
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"Moreover, since the bank still holds 39% of Primerica's stock, it will now have a higher value on this investment than when it owned 100% of the private entity at book value," Bove wrote. "Thus, capital goes up as assets come down."
Citigroup shares were lately up 6 cents, or 1.4%, to $4.24. Primerica was rallying 1.8% to $20 in its second day of trading on the
New York Stock Exchange
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In separate research notes, Bove said that
Morgan Stanley
(MS) - Get Morgan Stanley Report
looks good despite a tough first quarter, while
Credit Suisse
(CS) - Get Credit Suisse Group AG Report
has not turned around yet, although he does expect that to happen.
Bove reduced his 2010, 2011 and 2012 earnings estimates for Morgan Stanley, citing disappointing equity trading activity as well as the belief that the direct investment profits Morgan has received may now turn to losses as more and more real estate and other holdings are sold.
"The news for the company is not all bad however," Bove wrote. "It has restructured its Japanese holdings increasing its ties with Mitsubishi UFJ and received $277 million in the process. The company also pulled down the contract to sell the U.S. government's holdings of Citigroup."
Morgan Stanley was climbing 0.2% to $29.27.
Meanwhile, Bove cut his 2010, 2011 and 2012 earnings estimates for Credit Suisse, although he maintained his buy rating on the stock.
"The economic and financial issues in Europe are now becoming a problem in two fashions," Bove wrote. "First, the weakness in some economies is slowing loan demand. Second, there is the possibility of greater loan losses."
Despite this, Bove says that Credit Suisse's multiple is low and that the U.S. economy is turning more positive and it is still important enough to turn Europe higher. Credit Suisse shares were lately up 0.1% to $51.65.
Among other bank stocks,
Goldman Sachs
(GS) - Get Goldman Sachs Group, Inc. Report
advanced 1.6% to $172.87, while
Bank of America
(BAC) - Get Bank of America Corp Report
was flat at $18.04.
Meanwhile,
JPMorgan Chase
(JPM) - Get JPMorgan Chase & Co. Report
was trading 0.3% lower at $45.06, and
Wells Fargo
(WFC) - Get Wells Fargo & Company Report
slipped 0.1% to $31.34.
Among region bank names,
Regions Financial
(RF) - Get Regions Financial Corporation Report
,
Zions Bancorp
(ZION) - Get Zions Bancorporation, N.A. Report
and
M&T Bank
(MTB) - Get M&T Bank Corporation Report
shares were on the rise after Collins Stewart analysts upgraded the stocks on favorable outlook on credit quality and capital.
The firm upped its rating on Regions and Wells Fargo to buy from hold, and both Zions and M&T to hold from sell.
Regions climbed 4.8% to $8.14, Zions rose 5.6% to $23.11, and M&T gained 1.8% to $80.97.
-- Written by Robert Holmes in Boston
.
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