Richard Bove, an analyst with Rochdale Securities, told CNBC on Monday that he raised his rating on Citigroup (NYSE: C) to “buy” because he believes that the government will be able to sell its Citigroup stock without disrupting the market for the stock.
Bove also said that he believes Citigroup has strong fundamentals and suggest that investors buy Citigroup stock now rather than waiting for the U.S. treasury to sell off its 27% stake in the company. He believes that the government will sell off 8-10% of its 7.7 billion shares in the company per day, predicting that the Treasury Department will be completely divested from Citigroup by September or October.
Citigroup stock declined by 2.15% today to close at $4.09.
Bove set a new price target for Citigroup at $8.50, despite his prediction that Citigroup will lose money during the next two quarters.
