In The Citi

From Barrons - Jacqueline Doherty

LAST WEEK CITIGROUP ONCE AGAIN SPOOKED the market by warning investors it would report large loan write-downs in the second quarter. Analysts now expect write-offs of around $10 billion and, as you'd expect, the shares fell with a thud -- down 6% on the week, to 19.21. Citi (C) now is down an eye-popping 65% from its 2006 peak and trades just a tad north of its March low.
Even after the latest news, Dick Bove, an analyst at Ladenburg Thalmann, is positive on the shares. Write-offs will continue, he says, but the bank has raised billions in capital; it's adding low-cost deposits, increasing its loan volume, controlling costs and improving margins.
Write-offs are like the proverbial pig swallowed by a snake. They take time to work through, and the snake doesn't look too pretty. But once Citi's cleansing is over, Bove says, the company will look better than before. His price target: $25.