An update has just come out today on Credit Suisse Group (CS), in which senior banking analyst Ann H. Heffron, CFA is restating her Hold rating on the company. We excerpted the following details:
'We are continuing our Hold on Credit Suisse Group (aka CSG), but reducing our target price to $62. CSG reported 2007 third quarter earnings of CHF1,302 million, down 11% year over year. This reflected CHF2.2 billion in write-downs at the investment banking group in structured products and leveraged loan commitments related to credit market turmoil.
'We are reducing our EPADS estimates to $6.68 from $7.50 for 2007 and to $7.18 from $8.10 for 2008. We expect results to continue to reflect the uncertainty stemming from weakness in the sub-prime mortgage and credit markets. CSG has repurchased CHF3.7 billion under a CHF8 billion share repurchase program and posted a 12% rise in the annual dividend to a $1.97 indicated rate.
'At its current stock price, Credit Suisse trades at substantial discounts to the industry median, based on 2007 and 2008 consensus estimated earnings and price/book. The 3-5 year outlook for CSG's earnings growth is 10% versus 11% for the industry, while CSG's dividend yield of 3.3% is above the industry average. Our target price of $62 represents roughly an 8 ½X multiple of 2008 estimated earnings of $7.18 per share, trading roughly in line with CSGs closest peers, UBS (UBS) and Deutsche Bank (DB).'
Read the full analyst report on CS.
Read the full analyst report on UBS.
Read the full analyst report on DB.
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