Is Citibank a buy at $8 or will it go below $5 or lower again
Answers
2222 points
readytoretire answered one year ago …
Long term, it is a buy at $8. That is not to say that it won't go back below 6. I am afraid that we will retest the lows, and so Citi will give back some of that 8. I think they are now out of danger of going under, but there still is quite a bit of risk in this environment.
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251 points
MichaelShulman answered one year ago …
Despite the second capital injection and a guarantee of up to $300 billion in its debt/assets, I'm not going near Citi. The reason being, if Citi's off-balance sheet assets are not included in the guarantee -- and they don't appear to be -- the company will require significantly more capital to stay afloat.
The good news is that the Street is more aware that outfits like Citi have no earnings power going forward. Consider that Goldman Sachs earned $4 a share in 2002 and $22 a share in 2007 -- what is the real earnings power going forward? If it is $4, the stock is truly overvalued.
Suffice it to say, I'm still on the short side of the financials.
