Bove Believes Citi Is A Bargain; May Reach $8.50 In a Couple Of Years

In an interview on CNBC, Richard Bove, senior vice president at Rochdale Securities, rooted for Citigroup (NYSE: C) by saying that the stock is a solid buy as demand for credit and payment services is rising across the globe.

There has been intense speculation regarding the future prospects of Citi’s stock over the past several months. C continues to trade at a price that is 92% below the levels achieved 3 years ago.

Bove said emphatically that it is extremely critical to look at Citigroup’s future to gauge out whether the stock is an attractive bargain. "The operating businesses of the company have an unusually positive outlook for the future… The earnings per share should be 70 cents, and a couple of years from now, the stock should hit eight and a half. I think it's a buy," added Bove.

Harry Rady, CEO of Rady Asset Management, however, begs to differ. He believes that with its presence spread across 140 countries, it is impossible for the company to manage its business efficiently.

Rady said, “Bigger is not necessarily better… We want to buy the best-of-breed company in a given segment, and they're mediocre in a dozen different business segments.”

Although Rady acknowledged CEO Vikram Pandit’s efforts to strip C of underperforming assets, he stressed that it is too soon to expect solid earnings from the company.

According to Rady, “He's done a good job, there's no doubt about it. But he's got a long, long way to go."

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