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(C) - Get Citigroup Inc. Report

shares ticked lower on Wednesday as Goldman Sachs resumed coverage of the company with a neutral rating.

The stock was off just a penny to $3.17 in midday action and has traded in a tight range of $3.14-$3.19 for the day. Volume was almost 120 million vs. the issue's trailing three-month daily average of 506.8 million.

Despite the neutral rating, the note discussing the call had a generally positive tone.

"The first phase of Citigroup's restructuring is now complete with capital and liquidity levels higher than its peers," Goldman said in a research note to clients. "With leverage significantly reduced, the 'trade to tangible book' looks tempting."

The firm set a 12-month price target for the stock of $3.50, a level it was trading at as recently as mid-January. The big banks started the year strong but the group pulled back following

less than stellar quarterly results and a resurgence in regulatory concerns

. As of Tuesday's close, Citigroup shares were down about 4% year-to-date.

Goldman analysts cited three reasons for coming in at neutral, saying near-term earnings power for Citigroup is weak, that the stock offer less "provision leverage" than other pure U.S. plays, and that upside in the shares is likely capped by the government stake.

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But the firm noted the progress the company has made with its balance sheet, saying it has gone from being the most thinly capitalized bank at the trough of the credit cycle to one of the best in comparison to big bank peers like

Bank of America

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Wells Fargo

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"On liquidity, Citigroup now has over 10% of its balance sheet in cash and is shrinking borrowings 20% yoy

year-over-year, akin to the industry," Goldman said.


Written by Michael Baron in New York.