Richard Bove Sounding More Like Meredith Whitney on Citi (C, GS, MS)

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Citigroup Inc. (NYSE: C) is getting a more "in-line" view from analyst and fan Dick Bove of Ladenburg Thalmann.  Bove is capitulating at least a bit with the admission that the quarter may look worse than he previously thought.  Bove even noted this one as "No good news for Citigroup," despite his official recommendation remaining a "buy."

Bove now sees a loss of -$1.00 EPS, which is wider than the -$0.61 EPSloss he previously expected.  The 2008 loss is now estimated at -$3.17 EPS.  The reason for the call is what happened at Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley(NYSE: MS) after these firms through in the kitchen sink in theirquarterly reports.  He believes that the same factors may be at workwith Citigroup.

Part of the problems come from write-downs, commercial real estate, and junk bonds.

Bove has also taken down his price target to $14.00 from $17.00.He is still maintaining his overall positive stance towards the companyby noting that he still likes Citigroup’s stock "despite the batteringthis recommendation has taken."

Maybe Bove isn’t sounding exactly like Meredith Whitney on this call, but they are becoming more and more similar to each other.

  • We still think that Vikram Pandit will get caught up in the management changes over the next year.  We named him as one of the 10 CEO’s TO GO in 2009.  Almost all of the woes of Citi are not his doing, but his response time and other factors will potentially cost him his role if he even wants the job.

Shares of Citigroup are actually up almost 2% pre-market at $7.98.

Jon C. Ogg
December 18, 2008