UPDATE 1-RESEARCH ALERT-Punk Ziegel cuts Citigroup price target

lunedì 21 aprile 2008 13:27

(Adds details)

April 21 (Reuters) - Punk Ziegel analyst Richard Bove forecast a loss for Citigroup (C.N: Quotazione) in 2008 and cut his price target on the stock, after the company reported a first-quarter loss of $5.11 billion on Friday and said it will cut another 9,000 jobs.

"Citigroup's first quarter report has little to recommend it from virtually any perspective," Bove said in a note to clients.

Bove, who cut his price target on the stock to $31 from $34, also said it was likely that the loan loss provision will stay at an elevated level for Citigroup for at least another four quarters.

Bove said the company may recoup a large amount of its write-downs and reserve additions, going forward, if interest rates and the relevant indices recovered.

However, he continued to rate Citigroup a "buy," given its unique franchise, free cash flow position and efforts at a turnaround that could be successful.

"Large amounts of money + unique franchise will ultimately get improved execution and large profits."

Bove now expects Citigroup to post a loss of 18 cents a share for 2008, compared with his prior profit view of 50 cents a share. He cut his 2009 earnings estimates on the company to $2.73 a share from $3.57.

Shares of Citigroup closed at $25.11 Friday on the New York Stock Exchange. (Reporting by Ramya Dilip in Bangalore; Editing by Amitha Rajan)