The following is an excerpt from Andrew Barry | August 27, 2018 | Barrons.com |
Citigroup (ticker: C), owner of the second-largest bank in Mexico, stands to gain from the U.S.-Mexico trade accord that President Donald Trump announced Monday.
The stock closed up $1.72, or 2.4%, at $72.39, leading a strong banking sector. The group was up about 1%, as measured by the KBW index of 24 bank stocks.
Wells Fargo Securities analyst Mike Mayo wrote in a client note that Citi’s shares have been depressed this year by tension over trade between the U.S. and Mexico. Monday’s agreement should improve sentiment on Citi stock, which is down about 3% this year, making it one of the worst performers in the KBW index, he said.
“At a minimum, any new trade deal could reflect the absence of a negative and, on the upside, new potential growth opportunities,” Mayo wrote. Citi is Mayo’s top pick in the sector; he has assigned the company an Outperform rating, with a $100 price target.
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