April 21 (Reuters) - Punk Ziegel analyst Richard Bove forecast a loss for Citigroup (C.N) 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)