Magazine article American Banker

Citi Stock Will Hit $200 in a Year, Analyst Predicts

Magazine article American Banker

Citi Stock Will Hit $200 in a Year, Analyst Predicts

Article excerpt

As Citicorp investors rush to book profits from Monday's run-up in the stock, at least one analyst is advising them to sit tight.

Citicorp shares should rise 25%, to $200, within the next 12 months, Carla D'Arista of Friedman, Billings, Ramsey & Co., said Wednesday. Two days after the banking company unveiled its $70 billion merger pact with Travelers Group, Ms. D'Arista upgraded its stock to "buy" from "accumulate."

Citicorp shares, which soared 27%, to $182, on the merger news Monday, lost altitude Tuesday and Wednesday as investors pocketed gains. The stock closed yesterday at $164.875, down 25 cents.

The creation of the merged company, Citigroup, should help boost share prices short-term and produce $1 billion in incremental earnings over the next eight quarters, Ms. D'Arista said.

Citi, with 40 million customers in the United States, would add another 20 million with Travelers, and the combination presents a myriad of cross- selling opportunities, she said.

For the day, the Standard & Poor's bank index dropped 1.50% and the Dow Jones industrial average 0.73%. The Nasdaq bank index dipped 0.60% and the S&P 500 0.72%.

BankAmerica Corp. fell $2.125, to $84.50; Banc One Corp. shed $2.3125, to $61.625; Capital One Financial Corp. lost $1.625, to $83.3125; and Chase Manhattan Corp. slipped $3.375, to $140.125.

Bucking the tide, Whitney Holding Corp. jumped more than $3, before settling at $59.25, up 50 cents for the day.

The New Orleans banking company, with 100 branches in four southern states, is in the heart of the Southeast, an area targeted by superregional banks. …

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