Stock Picks: Citigroup, RIM

Plus Wall Street analyst opinions on M&T Bank and Diodes Inc.

Citigroup Inc. (C)

Standard & Poor's Equity Research maintains hold

According to an unconfirmed Wall Street Journal report on Dec. 8, the U.S. government is requiring Citigroup Inc. to raise $20 billion to repay TARP capital. S&P equity analyst Stuart Plesser said in a Dec. 8 note that he thinks a capital raise would significantly dilute shareholders and that Citigroup will refrain from an issuance until after the government sells its stake in the company.

Separately, noted Plesser, the report stated that the government is requiring Wells Fargo (WFC) to raise "billions" of dollars to repay TARP. "We don't think WFC is in any rush to repay TARP as compensation restraints associated with TARP are likely not as big of an issue for WFC compared to C," wrote Plesser.

Research in Motion Ltd. (RIMM)

Kaufman Bros. reiterates buy

After the close of trading Dec. 7, Research in Motion Ltd. announced an enhanced strategic partnership with China Mobile where it will support TD-SCDMA (3G) and TD-LTE (4G) wireless technologies as well as market BlackBerry smart phones to the enterprise, small business, and consumer markets. Kaufman analyst Shaw Wu said in a Dec. 8 note that while it is unclear if the deal is exclusive or precludes other deals, "it at least gives [RIM] a first-mover advantage at the largest carrier in China with 508 million subscribers."

Wu left his estimates of $14.5 billion in revenue and $4.08 in earnings per share for fiscal 2010 (vs. the Wall Street consensus forecasts of $14.9 billion and $4.15) and $17.1 billion in revenue and $4.75 in EPS for fiscal 2011 (vs. $18.2 billion and $4.82).

Wu believes "the addition of China as a growth opportunity gives RIM a greater chance of delivering if not exceeding our estimates." He has a price target of $93 on the shares.

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