Citicorp Still Has Momentum Even After Recent Gains

| About: Citigroup Inc. (C)

"One way to keep momentum going is to have constantly greater goals." - Michael Korda

Citicorp (NYSE:C) has done well since I took a position and profiled it in late October. Shares are up some 10% since then. However, these cheap shares keep racking up positive catalysts and the stock should have further upside in 2013.

Recent positives for Citigroup:

  • Stern Agee upgraded the shares from a "Neutral" to a "Buy" this morning. The company cites Citi's new CEO as a "game changer" (which is one of the key reasons I took a position in October).
  • Consensus earnings estimates for FY2013 continue to rise. Consensus earnings have moved up 12 cents a share in the last three months to $4.65.
  • Credit card delinquencies just reached their lowest levels in 18 years.
  • The housing recovery continues to gain momentum and prices for homes actually posted gains in 2012.

4 Reasons C still has value at $41 a share:

  1. The stock is still selling for less than 80% of book value.
  2. C is priced at less than 9x forward earnings and 7x operating cash flow.
  3. With a new CEO in place and improving fundamentals, I would expect the company to be able to gain permission from regulators to substantially increase its dividend in 2013.
  4. In addition to Stern Agee, Credit Suisse is positive on the stock. Credit Suisse has an "Outperform" rating and $48 price target on the shares. S&P maintains a "Buy" rating.

Disclosure: I am long C. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.