Citigroup could be the next Bank of America


It's hard to believe, but Bank of America had a stellar 2012 in terms of stock price appreciation. The stock nearly doubled, which is quite an achievement.

The notes that, "Heading into the New Year, however, some analysts expect 2013 will be the year that Citigroup's stock outperforms competitors. The difference between the two is that while investors now value Bank of America at just a small discount to its total assets, they don't give Citigroup the credit it deserves for resolving crisis issues and its improving earnings outlook, which could drive share repurchases or dividends in the New Year. According to Marty Mosby, a banking sector analyst with Guggenheim Partners, the compelling value of Citigroup relative to Bank of America follows a multi-year recovery process for both bailed out lenders. While Bank of America saw its stock jump over 100% as its balance sheet was shored up in 2012, Citigroup may credit for expense cuts that will drive meaningful earnings growth in 2013."

So is Citigroup in the early phases of a credit work-out driven recovery, which means it is in place for a big Bank of America-like surge? Mosby thinks so. He also thinks the bank's not getting credit for what will likely be a strong earnings year. Others are more than willing to make a similar bull case.

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