Citi (C) Falls To Unthinkable $8/Share Level
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A day after CEO Vikram Pandit's pep-talk, shares of Citi (NYSE: C) are down another 10% and trading at the 'unthinkable' $8 per share, a level not seen since 1995. The stock is down 46% in the last month alone and down 73% YTD.
This morning, influencial analyst Mike Mayo at Deutsche Bank cut his target on Citi from $16 to $9, saying they now see a loss of $0.30 in 2009 versus a profit of $1.50. The firm sees $1-$2B higher consumer credit losses per quarter in the first half of '09 and assume revenues will decline by 20%. Mayo said his loss estimates for '09 still has a downward bias as it does not reflect additional corporate credit losses, reserve builds, or capital market write-downs.
On a positive note, Mayo said Citi is moving $80B of assets away from mark-to-market which can reduce write-downs after the assets are transferred, but he said this also reduces transparency.
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