Optimistic UBS Analyst Sees Citi At $56

Citigroup has been looking sloppy for most of 2011, and downright ugly for the past month. Citi shares have declined 14% since the company’s reverse stock split on May 9, compared to a 2%  drop for the S&P 500.

Despite the severe funk in which the stock currently find itself, UBS analyst William Tanona forecasts Citi to gain nearly 50% in the next 12 months, coming out today with a bullish research note that features an eye-popping price target of $56 per share. In analyzing six comparable reverse stock splits over the past eleven years, it was found that stocks tend to underperform the market immediately following the split and Citigroup has been no exception.

Since early 2010, trading in Citi shares became dominated by retail investors, and we estimate it hit as high as two-thirds of total volumes in early 2011. However, since the reverse split, total retail volumes have dropped dramatically, with retail trading over the last few weeks representing about 15% of total volumes, which we would view as a more normalized level.

Now that average Joes have kicked their Citi addiction, Tanona sees valuation of the company driven more by fundamentals favored by institutional investors, like insurance companies and big pension funds.

Comments

Post a Comment

Popular posts from this blog

Indian Retail Industry 2012 - 2013

Image
                                                                   Rajesh Thambala – Research Analyst   1.   Introduction T he Indian retail landscape is evolved from the brick-and-mortar model to adopt technology for connecting with consumers. The aim is to achieve a complete seamless customer experience. The Indian retail sector accounts for over 20% of the country’s gross domestic product (GDP) and contributes 8% to total employment. The cumulative foreign direct investment (FDI) inflows in single-brand retail trading, during April 2000 to June 2011, stood at 69.26 million USD. The current estimated value of the Indian retail sector is about 500 billion USD and is pegged to reach 1.3 trillion USD by 2020.   2.   Retail Industry in India The total concept and idea of shopping has undergone a vast drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into India as is obse
Read more

The future of e-Learning

Image
                                                                                                  - Rajesh Thambala   Transforming education for future is an excellent introduction to how digital culture is influencing visions of education.  The argument is that the current educational system exists to prepare people for a 19th and 20th century, and that must be recreated in order to prepare students for future.  This goes beyond reading, writing, math, and science.  It explores the role of digital literacy; critical thinking and problem solving; and new approaches to collaboration, communication and creation.     As the learners want more and more control over the learning process and interactive media caters to that demand. Social learning is playing a vital role but this is just a beginning. Such media provides the learner the advantage of interactive games, scores and instant feedback.     There are number of social networking technologies finding their way in
Read more

The Indian retail industry 2020

The Indian retail industry is one of the fastest growing in the world. Retail industry in India is expected to grow to US$ 1.3 trillion by 2020, registering a Compound Annual Growth Rate (CAGR) of 16.7 per cent over 2015-20.    India is the fifth largest preferred retail destination globally. The country is among the highest in the world in terms of per capita retail store availability. India’s retail sector is experiencing exponential growth, with retail development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities. Healthy economic growth, changing demographic profile, increasing disposable incomes, urbanisation, changing consumer tastes and preferences are the other factors driving growth in the organised retail market in India.    India’s population is taking to online retail in a big way. The online retail market is expected to grow from US$ 6 billion to US$ 70 billion during FY15-FY20.   Increasing participation from foreig
Read more