"We believe that it still leaves the company short of capital relative to peers," Citigroup said.
The brokerage estimated that Barclays would need 6.6 billion pounds of additional equity to reach the same capital position as Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) and 8.6 billion pounds to meet the European banking sector average.
Barclays, which has lost more than $5 billion on assets hurt by the U.S. subprime crisis and credit crunch, said last week it planned to raise billions of pounds to rebuild its capital base.
Citigroup kept its "sell" rating on the stock and cut its price target to 275 pence from 350 pence.
Citigroup said Barclays' investment bank arm, Barclays Capital (Barcap), is struggling with revenue headwinds and structured credit exposures, whereas the main retail and commercial bank is dominated by UK, South Africa and Spain, all geographies experiencing problems.
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