A Key Level For Citigroup (C) Investors To Watch Is Approaching Fast

While shares of Citigroup (NYSE: C) have surged over the past week, there is an crucial valuation level fast approaching that investors and traders need to keep a close eye on - tangible book value.

Many have said shares of Citigroup should trade at least 1x tangible book value which was $4.15 at the end of the last quarter.

With shares of Citigroup trading at $3.95 per share, there is just a little more upside until this level is reached.

Some analysts think the shares should trade at 1.2x tangible book value. So there is a credible argument that Citigroup should trade at $5 per share. And if you go to the peer multiple of 1.75x you an come up with a price of $7.26.

While tangible book value is a solid way to value a bank, some - like Warren Buffett - like to see earnings power from a bank. The 2011 consensus earning estimate on Citigroup (NYSE: C) is $0.34, so currently shares are trading at a multiple of 11.6x this number. Competitor JP Morgan (NYSE: JPM) is trading at a multiple of 9x their 2011 consensus. Wells Fargo & Company (NYSE: WFC) is trading at 10.5x their 2011 consensus and Morgan Stanley (NYSE: MS) is trading at 8.5x their 2011 consensus.

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