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Citi a Value Play with This Price Target: Kotowski

Tuesday, 7 Dec 2010 | 2:00 PM ET

The US government sold off its remaining ownership of Citigroup, booking $12 billion in total profit and sending shares higher on Tuesday. Chris Kotowski, senior research analyst at Oppenheimer, tells CNBC why there is still more upside for the stock.

Gov't Exits Citigroup
The government sold off its remaining shares in Citi for $4.35 a piece. Is Citi worth your investment dollar? Insight with Chris Kotowski, Oppenheimer & Co.

Concerns of Citi's long-term survivability "can be put to bed," Kotowski said.

"If you look at the businesses in the ongoing Citicorp, a lot of them are actually doing really well."

Kotowski points to Citi's institutional bank and transaction services business gaining market share against other big-bank competitors. While Citi Holdings continues to bleed earnings, he believes the company's restructuring efforts and business trimming is the "right strategy."

With Citigroup having returned to profitability and posting a cleaner credit picture, Kotowski sees the stock as a value play, with the potential to reach $5 a share. The government sold the last of its holdings on Monday, at $4.35 a share.

Beyond the low $5 range, Kotowski believes the bank would need to show evidence of a growth story, which he considers likely.

In the banking industry as a whole, however, Kotowski says the "single best" value is still JPMorgan Chase, with a $6-share earnings power.

Kotowski likes:

Citigroup

JPMorgan

Morgan Stanley

Goldman Sachs

US Bancorp

Wells Fargo

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Scorecard—What He Said:


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More Market Analysis:

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CNBC Data Pages:

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Disclosures:

No immediate information was available for Kotowski or his firm.

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Disclaimer

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