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Shares of Citigroup (C) were rising in premarket trading Thursday after analysts at fellow investment bank Goldman Sachs upgraded the stock and raised their price target. 

The stock was rising 1.7% to $64.52 a share in premarket trading. 

Goldman Sachs analyst Richard Ramsden upgraded the stock to buy from neutral and raised his price target to $77 from $71. The new price target reflects 21% upside from the stock's current level. 

Ramsden thinks Citigroup has a "realistic path" to achieving a return on equity of 13% in 2020, which is 100 basis points higher than consensus estimates. Citigroup's target return on equity is 13.5%. Ramsden said he thinks investors are "overly pessimistic" on Citi's ability to reach its return on equity target, even though the stock has risen 19% year to date, beating the 13% gain for the S&P SPDR large-cap bank ETF, which has fallen 2.23% in the past five days as the inverted three-month and 10-year Treasury yields have pushed bank stocks lower.

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But there's a silver lining for Citi. "Investors will continue to gravitate towards banks that can grow revenues and increase returns without the benefit of interest rate hikes or an improvement in global growth trends," Ramsden said. "C has the lowest sensitivity in our coverage to both short-end rate movements and to the long end of the curve, suggesting their return improvements are the least dependent on fluctuations in the yield curve." 

Citigroup is currently trading at a price-to-book ratio of 0.83, lower than its peers. Ramsden's price target implies a price-to-book of roughly 1. Ramsden thinks the bank can achieve the 13% ROE because of the company's ability to execute its cost savings plan, and because revenue growth can inflect positive.

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