Citi Says Buy the Weakness in JPMorgan (JPM), Adds to 'Absolute Buy' List

While one analyst downgraded a number of US banks Monday morning as fears in Europe continue to make headlines, Citi's Keith Horowitz is telling clients to take advantage of recent downside in JPMorgan (NYSE: JPM) shares. The analyst named the stock to Citi's "Absolute Buy" list.

Horowitz noted JPMorgan is currently trading at around a 4 percent discount to tangible book value following an 18 percent decline in the stock amid May 10th news of a $2 billion trading loss at the firm's CIO unit. The analyst believes the estimates for the trading loss are "getting a bit carried away," and, compared to potential earnings power, this loss is manageable. Despite comments from Jamie Dimon Monday morning, Horowitz sees JPMorgan completing $4 billion in buybacks this year.

The Citi analyst said increased transparency at JPMorgn will eventually lead to higher valuation, however he feels the "disturbing" change in value at risk needs to be addressed.

JPMorgan shares are down about 1 percent to $33.14 at last check. The broader Financial Select Sector SPDR ETF (NYSE: XLF) is up more than 1 percent.

Visit our Analyst Ratings page to track all the market-moving analyst calls on shares of JPMorgan.

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