Citigroup Inc (C)

[JustCallMeSassy]

Published: Thursday, 20 Aug 2009 | 10:43 AM ET Text Size By: JeeYeon Park
News Associate

There’s a lot of risk that comes with Citigroup right now, said David Trone, securities industry analyst at Fox-Pitt, Kelton.

“We don’t think [Citigroup] is a sell because they did the massive dilutive capital raise by converting the preferred,” Trone told CNBC. “So we do think the company is out of the woods in terms of the downside.”

In the best-case scenario, Citigroup will earn about 60 cents a share in two years, making it a $6 stock after the bank's problem loans and securities have been dealt with, said Trone.

Trone has an “in-line” rating on Citigroup [C 4.34 0.21 (+5.08%) ].

“But that’s for long-term value people that can stomach the $45 billion in loan losses that probably will come over the next six quarters,” he said.

Trone said it will be problematic for Citigroup if the government decides to split off the investment banking division of the company.

“The investment bank has already lost a lot of good people and they need that synergy with the commercial lending arm and so that will be value-destroying,” he said.