BofA (BAC) 'Yeah', Citi (C) 'Neah' - Meredith Whitney

February 7, 2013 12:01 PM EST
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Noted bank analyst Meredith Whitney is really hot for Bank of America (NYSE: BAC). On "Bloomberg Surveillance" this morning she said Bank of America is the stock to own this year "without a doubt." She wasn't so hot about Citi (NYSE: C).

"I think that Citi does ok, but I think Bank of America is the stock to own this year without a doubt," Whitney. "There is so much financial leverage with that name. They will return I think over $4 billion in buybacks. It could be $5 billion in buybacks this year and really move the needle. I think that stock easily goes to 15 in the next six to nine months."

Whitney said people underestimate Bank of America's CEO Brian Moynihan and described his management style as "block and tackle, understated." People underestimate him, which is the advantage that every CEO should look for," she said. "It has cost him in the past, but I think it is really going to help him. I think he will look terrific this year."

The jury is still out on new Citi CEO Michael Corbat, she notes: "What we do know is Mike O'Neill's history, he's the chairman. He likes to downsize, he likes to sell stuff. We know his agenda. We do not know Michael Corbat's agenda. he did not give us an agenda or even a time stamp for when he's going to give us an agenda, so it left people a little bit uninspired."

She said all banks are having a hard time justifying their cost base. "They're all running at excessive expense ratios," she comments. "Bank of America, in 2010 announced its cost-cutting initiatives, and two years later we're only starting to see results…It takes a long time…The point is, if you're not in top of it now, you will be behind the game."

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