Credit Suisse Group achieved a strong performance in 2009, with net income of CHF 6.7 billion, a return on equity of 18.3% and net new assets of CHF 44.2 billion. The tier 1 ratio was 16.3%. In 4Q09, the Group recorded net income of CHF 0.8 billion, a return on equity of 8.3% and net new assets of CHF 12.5 billion, demonstrating the resilience of the business despite lower client trading activity in November and December. The Board of Directors will propose a cash dividend of CHF 2.00 per share for 2009.
Deutsche Bank trims Credit Suisse target price to CHF72 from CHF76 after "high-quality" 4Q earnings which nevertheless missed expectations. "Underlying trends in the private bank and advisory and underwriting franchises were good, the dividend pleasing, and capital strength ahead of the pack," Deutsche says. The stock's buy recommendation is repeated in the back of the bank's favorable start in 2010.
Keefe, Bruyette & Woods cuts Credit Suisse target price to CHF60 from CHF65 after cutting EPS estimates to account for a higher tax rate. The 2010 EPS is lowered to CHF6.25 from CHF6.79, and 2011 goes to CHF7.06 from CHF7.58. The move follows what KBW terms a noticeable shift to US and UK-based investment banking in recent years. KBW sees Credit Suisse stock at a "far from demanding" value, given its confident outlook, deal pipeline and post-crisis January inflows. A healthy dividend-per-share yield also supports the case for the shares. Rates at marketperform.
Helvea lowers its price target on Credit Suisse to CHF59.30, from CHF61.20, because higher-than-expected assets under management will be overshadowed by higher cost expectations. "There is good fundamental value in Credit Suisse shares, but there are numerous concerns which are likely to keep investors on the sidelines," says Helvea. Rating held at neutral.
Morgan Stanley trims Credit Suisse target price to CHF70 from CHF72 but remains overweight on the stock after 4Q earnings. "Credit Suisse's private banking momentum means it could become larger than UBS in Swiss private banking going into 2011, excluding retail brokerage," Morgan Stanley says.
