The banking giant is finally starting to become a favorite of analyst everywhere. Rochdale Securities analyst Dick Bove has been bullish on the bank for some time now. Goldman Sachs added Citigroup (C) to its conviction buy list today. Shares of Citigroup responded by rising 2.4% today to close at $4.21 per share.
I have not been a fan of Citigroup in the past but things are looking better at Citigroup. The firm has been doing a nice job reducing its size by selling off riskier assets. The bank has a lot less exposure to the residential real estate market than its banking peers. Bank of America and JPMorgan’s loan portfolios dwarf those of Citigroup. According to the Wall Street Journal, Citigroup has only $95 billion dollars in mortgage loan exposure through its consumer banking and its securities banking business.
Goldman also credited Citigroup’s efficient loan review process with helping the banking giant avoid a lot of exposure to the toxic mortgage market. Goldman has a price target of $5.50 per share meaning that the investment bank still see 30% more upside in the shares. I agree with the Goldman’s call and have been bullish on shares of Citigroup since April of this year.
Disclosure: I do not own shares of Citigroup.