Bove Sees Citi (C) Shares Around $8.50 Within Several Years

In an interview from this morning, banking analyst Dick Bove and tech ticker's Henry Blodget discussed the price of Citi (NYSE: C) shares. Although the Rochdale analyst is expecting near-term downside in Citi's stock price, he believes that shares could more than double in the next few years as earnings return to normalized levels.

Bove said he has a very positive outlook for the stock, but that this is not necessarily "what stockholders oughta do." With the government looking like it will begin dumping shares of Citi at a "relatively rapid" pace, the analyst cautioned that shareholders will need to absorb 7 billion shares and that this action could push the stock price down to the $3.75-$3.80 level.

This, however, is exactly when Bove believes the stock could start heating up as an investment. He reminded viewers that Citi has now rather-effectively shed assets and will be left with just a few core businesses:

• a unit which services large corporations around the world
  
• an international credit card division
  
• a capital markets division and
  
• numerous retail banks in New York City

Bove pointed out that this Citi -- Citicorp -- will certainly be a different Citi than the one we knew two years ago. He predicted that these "4 or 5 very attractive businesses" could pull in as much as $0.70 a share within the next few years, eventually leading to a stock price around $8.50.

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