Credit Suisse (NYSE:CS)(GB:0QP5) stock has lost over 50% of its value year-to-date on concerns over financial health. Though the company is in the middle of a strategic review and is selling assets to inject liquidity, 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.
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Goy stated that “the market sell-off, a deteriorating investment banking environment, rising funding costs, and a lower share price” compounded the bank’s issues that include “low profitability (mainly driven by its Investment Bank), poor capital generation and significant litigation risks when capital ratios at the group and key entities are below mid-term targets.”
Nevertheless, Credit Suisse is taking measures to inject more liquidity into its business. Recently, Bloomberg reported that Credit Suisse is considering selling its U.S. asset-management business. The move could be a part of its comprehensive strategic review that includes potential asset sales and divestitures. Further, the sale of the business will bring funds to support its restructuring plan.
Further, it announced the buyback of $3 billion in debt to calm investors and optimize interest expenses. While concerns about its financial health are blown out of proportion, Credit Suisse must add more liquidity to its business. The financial services company will provide further details about its strategic review when it reports 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. Moreover, these analysts’ average price target of SFr.6.15 implies 37.1% upside potential from current levels. Meanwhile, CS stock has a Neutral Smart Score of four out of 10 on TipRanks.
