Citigroup and Bank of Americahave both been pummeled equally in the stock market in the past month, but analysts say Citigroup is the better opportunity.
Last week, UBS analyst William Tanona said the stock of Citi deserved a premium over Bank of America as it faces "less dramatic uncertainties" from large, mortgage-related liabilities and stronger earnings power.
On Wednesday, Glenn Schorr at Nomura released a report, making similar arguments. While the analyst thinks the selloff in both the stocks is overdone, he still prefers Citigroup and JPMorgan Chase over Bank of America. "[G]iven similar valuations, we think Citi is the more attractive opportunity, based on its edge in capital, reserves, exposure to the growth markets and smaller mortgage-related risks. We also see attractive value in JPM at 1.0 (times) tangible book."
Schorr lists four reasons why Citi is not Bank of America:
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