Sunday, December 18, 2005

Citigroup stalks 50, JP Morgan Chase 40

With C up 12% and JPM up 20% since mid-October, both are approaching territory that they haven't seen for 18 months--for C $50 a share and for JPM $40. As multifaceted financial services conglomerates, these firms had until recently not participated in the average 37% rise in pure play investment banks this year, despite clearly being among the leaders in that field. With both having current dividend yields around 3.5% and with the expected yield curve crunch on the consumer business not materializing, the relative attractiveness of these powerful but complex franchises is finally getting the attention of the market. While the thresholds of $50 and $40 are cosmetic, in the corridors of these firms with broad based stock and/or option programs for employees, it probably looks and feels attractive. That's a good thing.


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