Bank of America Merrill Lynch analyst Erika Penala on Monday reiterated her "Buy" rating for Citigroup, calling the company "the one discounted, real recovery story left in U.S. banks - a recovery that we believe is clearly on track, as affirmed by 3Q12 results."

Penala's price objective for Citigroup is $45, and she expects the company to return roughly $4 billion in capital to investors during 2013.

"Over time, we expect C to return 11% of market-cap to shareholders," Penala said, adding that "an approval in Mar '13 would not only establish C as a capital return story, but could give investors confidence that there are no 'tail risk' issues -key for money center multiples to re-rate higher."

Citigroup's multiples are particularly low. The shares trade for 0.7 times their reported Sept. 30 tangible book value of $52.70, and for eight times the consensus 2013 earnings estimate of $4.64 a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $5.04.

Citi's shares have now returned 39% year-to-date, following a 44% decline during 2011.

C Chart C data by YCharts

Interested in more on Citigroup? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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