Building Credibility And Value Still A Work In Progress For Citigroup

Investors remain skeptical that Citigroup (C) will hit the 2020 targets that management laid out this summer, and the share performance has been lackluster - since the third quarter, Citigroup's performance has trailed JPMorgan (JPM), Bank of America (BAC), and Wells Fargo (WFC) by a pretty significant margin. While Citi isn't blowing the doors off with its recent performance, and I continue to believe that the bank will come up a little short of its 2020 targets, it's not like Citigroup is doing a horrible job either.

I believe Citigroup's business model will always be an impediment to its performance, but I also believe that this is a business that can generate returns above its cost of capital and that it is trading below fair value today - a rare occurrence among larger banks. If Citi can generate around 5% adjusted earnings growth from here, $80 looks like a reasonable fair value, and the shares are worth a look for patient investors who want exposure to large-cap banks without overpaying.

Read more here:
Building Credibility And Value Still A Work In Progress For Citigroup