Billionaire Lee Cooperman Says The Market Is Expensive But These 10 Stocks Are Cheap

2. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Investors: 94

Citigroup Inc. (NYSE:C), based in New York City, is a major global financial services company. Citigroup Inc. (NYSE:C) offers a broad range of financial products and services, including banking, investment, and wealth management. With a large network of branches and subsidiaries around the world, Citigroup Inc. (NYSE:C) serves millions of clients through its consumer, corporate, and investment banking segments.

When asked about Citigroup Inc. (NYSE:C), Leon Cooperman mentioned that he currently owns shares in the bank. He noted that banks face structural issues and are hesitant to lend, despite that being their primary business.

“I own Citi, I own it right now. Banks have structural problems. They’re afraid to lend to people, and that’s the business they’re in.”

Citigroup Inc. (NYSE:C) is seen as a strong investment due to its solid capitalization and well-balanced business model. According to IP Banking Research analysts, even if a U.S. recession leads to challenges like falling interest rates, higher loan losses, and increased trading volatility, Citigroup Inc. (NYSE:C)’s diverse business activities and cautious financial practices help shield it from these risks.

Citigroup Inc. (NYSE:C) is also working on improving its efficiency through restructuring and has made notable progress in enhancing credit quality and reducing bad loans. With its stock priced lower than many of its peers, Citigroup Inc. (NYSE:C) offers a promising opportunity for value investors. Analysts expect that as the bank continues its strategic improvements and investor sentiment potentially rises, Citigroup Inc. (NYSE:C)’s stock could experience significant gains.

IP Banking Research projects Citigroup Inc. (NYSE:C)’s value at $80 by 2026, based on a valuation of 0.8 times a $100 target value. This estimate is conservative, assuming the bank will achieve a return on tangible common equity (ROTCE) of about 10% by 2026, which is lower than the management’s guidance of 11% to 12%. Despite this conservative forecast, the analyst remains very bullish on Citigroup Inc. (NYSE:C) and plans to increase their investment if market conditions present further opportunities.

Diamond Hill Capital Long-Short Fund stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:

“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”