Citigroup Gets 'Sell' Rating, May Face $15 Billion Hit

[EV_Ares]

Goldman Sachs analysts downgraded Citigroup to "sell" and said the largest U.S. bank may have to write off $15 billion for debt losses over the next two quarters, and it placed it on "Americas Sell List."

The report by analysts led by William Tanona came shortly after Citigroup's own chief U.S. equity strategist, Tobias Levkovich, upgraded the nation's banking sector to "overweight" from "market weight," calling selling pressure "overdone."

Goldman's projection for a Citigroup write-off compares with the $8 billion to $11 billion that New York-based Citigroup on Nov. 4 said it may need to write off this quarter for a $43 billion CDO exposure tied to subprime mortgages.

The Goldman analysts also cut Citigroup's profit-per-share forecast to $3.80 from $4.65 for 2008, and to $4.60 from $5.20 in 2009. Their 12-month price target is $33 per share.

"With deteriorating consumer and housing metrics, Citigroup is facing mounting pressure across many businesses," Tanona wrote. "Further magnifying the earnings decline is a peer-low tier-1 capital ratio, which may lead the firm to pursue either a capital infusion or the prospect of reducing its current dividend."

rest of article @ link: http://www.cnbc.com/id/21880280