UPDATE: Citigroup Downgrades Bank of America to Neutral

Citigroup lowers its rating on Bank of America

on persisting headwinds in earnings, while raising its price target slightly to $8.50 from $8 on lower cost of equity assumption on beta (now using 1.5). Citigroup says, "We are downgrading BAC reflecting our view that at current levels the risk/reward tradeoff for BAC is relatively balanced in the near term. Longer term, we believe BAC still offers attractive value as the company addresses its legacy issues, which should drive down the perceived risk in the stock (reflected via its 3 year beta of 1.6, which is the highest in our universe) and its cost of equity. However, we believe legacy issues will take a while to play out, and our Neutral rating reflects a 1 year outlook." BAC closed at $8.25 a share on Monday.