Goldman Sachs and Citigroup stocks remain good opportunities for investors despite obstacles both companies face, analyst Dick Bove told CNBC.
The two banking titans have been in the news for different reasons—Goldman because it is under fire for its conduct during the mortgage market collapse and Citi for the government's move to start shedding its interestafter bailing out the company.
Citi continues its rebound and could see its shares nearly double in price to $8.50, said Bove, banking analyst for Rochdale Securities.
"If you're looking at the fundamentals alone, the stock should be a buy," he said.
As for Goldman, Bove said the stock remains a buy even as it needs a management change.
A congressional hearing this week will examine Goldman's strategy as the subprime mortgage market collapsed. The government recently charged Goldman with failing to disclose that a key investor was betting against and had a significant role in assembling a portfolio of mortgages Goldman was marketing to other investors.
"The issue in my view is not the specific transaction. The issue is why did they pick on Goldman?" said Bove, who pointed out that other institutions such as Bank of America and JPMorgan Chase were larger players in the collateralized debt obligation market that traded the lower-quality mortgages.
"The company hasn't protected its franchise properly," he added. "I think that's extraordinarily bad and something has to be done about it."
He said the company should return to a two-tiered top management structure.
"You've got to bring in some outside legal expert to write a new mission statement or the company to show...that there is an epochal issue that has to be brought out and that epochal issue has to be dealt with by the company," Bove said.