UPDATE: Citigroup Downgrades Nationstar Mortgage Holdings to Neutral on Less Compelling Risk/Reward

Citigroup lowers its rating on Nationstar Mortgage Holdings

from Buy to Neutral (both High Risk). Price target is raised, however, from $18 to $20. Citigroup notes, "We are downgrading Nationstar Mortgage Holdings (NSM) to Neutral (2H) from Buy (1H) and raising our target to $20. Since our April initiation, NSM shares have run up 40%, sharply outperforming the S&P 500 (-7%) and BKX (-13%). Aside from a valuation call, we believe the stock could be vulnerable to a pull back on any negative headlines around the ResCap deal such as a competing bid or delays. However, we still put the odds of NSM winning ResCap at 75% and would use any material downside as a buying opportunity." NSM closed at $19.80 on Tuesday.