Bank of America Reiterates on Citigroup as EM Credit Concerns are Overblown

In a report published Thursday, Bank of America analyst Erika Najarian reiterated a Buy rating and $58.00 price target on Citigroup C. In the report, Bank of America noted, “C is once again trading below current tangible book (TBV), and in this report, we explore why we believe this signals an especially good buying opportunity. We think emerging markets (EM) headline risk is driving a big part of this discount. As a result, we introduce Part 1 of a multi-part “Emerging Markets Primer” for C investors, with this report focusing on credit trends in C's EM consumer book. Based on our analysis, we conclude that an EM consumer credit shock would be, at worst, a 7% (41c) hit to '14 EPS, using industry high net charge-off rates for each country of major exposure. Even in that scenario, C's TBV should still grow by 11%.” Citigroup closed on Wednesday at $48.62.