Buy Citigroup For Strong Capital Position And Attractive Valuations

Citigroup has attractive relative valuations compared to its peers in the U.S. money center banks sector. The stock that has seen over 37% appreciation in price is trading at a 43% discount to its book value. This is compared to a 53% discount and a 20% premium for Bank of America and Wells Fargo. Using a book value multiple of 0.68 times, we arrive at a target price of $43.2 for a stock that is currently trading at $36.1. This gives investors an upside potential of 20%. The consensus mean price target is $42.9.

In conclusion, we believe the bank could face a significant risk if the economic recovery in Asia doesn't pick up. However, the bank has strong fundamentals and attractive valuations compared to its peers. Therefore, we reiterate our buy rating on the Citigroup. Find more here.