Citigroup: Financial Winners and Losers
(
Updated with final stock price moves, Citigroup's four-part note sale.
)
NEW YORK (
) --
Citigroup
(C) - Get Report
was among the winners of the financial sector Tuesday after an analyst raised his stock price target for the bank by 62%.
Rochdale Securities analyst Dick Bove raised his price target on Citigroup stock to $6.50 from $4, saying that the reason is the "dramatic change" in Citigroup's structure which may lead to a higher price to pretax, pre-provision earnings multiple.
Bove said that, despite constant management changes, government ownership, the sale of several assets and the company's significant capital needs, Citigroup has "one of the most impressive top management teams in banking" and that it is actually winning some impressive mandates.
"The company has an attractive long-term future as an international bank with strong corporate, high wealth and payment services customers," Bove wrote in his research note. "This future will be funded by one of the most liquid balance sheets in banking."
Meanwhile,
Reuters
reported that Citi launched a $5 billion four-part government-guaranteed note sale, with pricing expected later on Tuesday, citing a market source. The notes are guaranteed under the Federal Deposit Insurance Corp's Temporary Liquidity Guarantee Program, the report said.
Citigroup shares finished the day higher by 13 cents, or 2.8%, at $4.70.
Among other analyst moves, FBR Capital Markets altered ratings and price targets on several financial institutions as the firm established a "proprietary framework that incorporates risk and reward" that "is meant to be used as a tool for evaluating opportunities for achieving relative outperformance in the bank space."
FBR upgraded
Zions Bancorp
(ZION) - Get Report
and
Huntington Bancshares
(HBAN) - Get Report
to outperform from market perform, raising the stock price targets to $20 and $5 from $17 and $4, respectively.
FBR raised its rating for
PNC Financial
(PNC) - Get Report
,
New York Community Bancorp
(NYB)
,
City National
(CYN)
and
U.S. Bancorp
(USB) - Get Report
to market perform from underperform, hiking the price targets for each to $43, $10, $37 and $21, respectively.
On the downside, FBR cut its rating for
Synovus Financial
(SNV) - Get Report
to underperform from market perform. The firm also reduced the stock price target for Synovus to $2.50 from $3.
Following the FBR ratings shuffle, Huntington added 4.8% to $4.40, PNC was higher by 3.1% at $47.99, New York Community climbed 2.3% to $11.36, and City National tacked on 0.8% to $39.14. Zions shares ended the day flat at $18.19, while U.S. Bancorp was lower by 2.2% at $21.75 and Synovus slid 4.4% to $3.73.
Elsewhere, Standard & Poor's Ratings downgraded
MBIA's
(MBI) - Get Report
main bond-insurance unit to a BB+ rating, which is non-investment grade or junk status. S&P expressed concern that the unit could suffer more losses from residential mortgage-backed securities and collateralized debt obligations it sold during the credit boom.
S&P also said the outlook on MBIA and the holding company is negative. MBIA shares fell 39 cents, or 4.7%, to $7.83. Fellow bond insurer
Ambac Financial
(ABK)
finished the day 1.7% lower at $1.78.
Away from analyst moves, Swiss bank
(UBS) - Get Report
said Sergio Marchionne, the board's senior independent director, and Peter Voser will step down from the board in April. Marchionne is the CEO of Italian automaker
Fiat
. Voser is CEO of oil company
Royal Dutch Shell
(RDS.A)
.
Meanwhile,
The Financial Times
reports that UBS Chief Executive Oswald Gruebel said its U.S. wealth management unit Paine Webber is not a core part of the bank's operations but will not be sold at current valuations. Gruebel also told the paper the bank wants to cut ties with the Swiss government by buying its way out of a 'bad bank' scheme.
UBS shares ended the day lower by 31 cents, or 1.7%, to $18.40.
Other bank stocks were mixed Tuesday.
Wells Fargo
(WFC) - Get Report
was lower by 1.9% to finish at $28.35,
Morgan Stanley
(MS) - Get Report
was off 0.5% to $31.09, and
Bank of America
(BAC) - Get Report
slipped 0.4% to $17.16.
On the other hand,
JPMorgan Chase
(JPM) - Get Report
rose 0.2% to $44.88 and
Goldman Sachs
(GS) - Get Report
added 0.6% to finish at $183.58.
In other bank-related news, the
Federal Deposit Insurance Corp.
is expected Tuesday to propose that U.S. banks prepay three years of fees to replenish the fund, reports say. A source, speaking to
Reuters
, said the FDIC likely would propose for the banking industry to prepay $12 billion a year in assessments, for a total of $36 billion.
The Wall Street Journal
said the fees could be as high as $54 billion after having the banks prepay fees for 2010, 2011 and 2012. The FDIC is meeting Tuesday. An FDIC spokesman declined to comment.
-- Written by Robert Holmes in New York
.
