Swiss credit (New York Stock Exchange: CS)(GB: 0QP5) the stock has lost more than 50% of its value since the start of the year due to concerns about its financial health. Although the company is in the midst of a strategic review and is selling assets to inject cash, the execution risk associated with its restructuring plan could play spoilsport, noted Deutsche Bank analyst Benjamin Goy. . The analyst has a Hold rating on Credit Suisse with a price target of SFr.6.
Goy said “the market sell-off, deteriorating investment banking environment, rising funding costs and declining share price” have compounded the bank’s problems, including “a low profitability (mainly due to its investment bank), low capital generation and significant litigation risks when the capital ratios of the group and the main entities are below medium-term objectives.
Nonetheless, Credit Suisse is taking steps to inject more cash into its operations. Recently, Bloomberg announced that Credit Suisse is considering selling its US asset management business. The move could form part of its comprehensive strategic review that includes potential asset sales and divestments. In addition, the sale of the business will provide funds to support its restructuring plan.
In addition, he announced the buyback of $3 billion in debt to calm investors and optimize interest charges. As concerns about its financial health are overblown, Credit Suisse needs to add more cash to its operations. The financial services company will provide further details on its strategic review when it releases third quarter results on October 27.
Is Credit Suisse stock a buy, sell or hold?
On TipRanks, Credit Suisse is a Hold based on two Buy, 10 Hold and four Sell recommendations. Additionally, these analysts’ average price target of 6.15 Swiss francs implies upside potential of 37.1% from current levels. Meanwhile, the CS stock has a neutral smart score of four out of 10 on TipRanks.