Citigroup stock is "seriously undervalued," as a government selloff in its holdings and promising restructuring plans have not been fully realized in its tangible book value, Rochdale Securities banking analyst Dick Bove said in a research note Wednesday.
He reiterated his "buy" rating and $6.90 price target on the stock .
"One example of the fact that the company's tangible book value is understated is Primerica," Bove wrote. "Approximately 60 percent of the company was spun off a month ago. The almost 40 percent that Citigroup still owns is now worth close to $700 million."
Bove further wrote that the company's stock is reflecting the US government's sale of its holdings, and not the intrinsic value of the company. He also pointed to the bank's plan to restructure CitiFinancial to make it more saleable.
Bove commended Chief Executive Vikram Pandit's leadership, saying he "has guided the transformation of this company from what was essentially a bankrupt entity to what is now likely to be one of the country's strongest banks."
In April, Bove told CNBC that Citigroup was a good opportunity for investors, saying its shares could double in price to $8.50.
The bank's shares were more than 1 percent higher at nearly $4 in afternoon trading on the New York Stock Exchange.
—Disclosure: Bove does not own shares of Citigroup