Credit Suisse Group AG shares are now a “buy for the brave,” said Citigroup Inc. analysts on Monday, as the Swiss bank’s stock plunged to a fresh low.
A closely-followed gauge of credit risk for the bank is at record high, even after its Chief Executive Officer Ulrich Koerner had sought to calm employees over the weekend. The word of reassurance came ahead of Credit Suisse’s strategic plan -- on possible asset and business sales -- to be unveiled at the end of October.
There remain reasons to be cautious, according to Citi analysts. “We do see significant execution risk in any new strategic plan,” wrote Andrew Coombs, who is one of four analysts with a buy rating on the stock. Elsewhere 15 others have a hold and nine have sell, according to Bloomberg data.
Markets seemed to be pricing in a “highly” dilutive capital raise, added Coombs, in a note titled “This is not 2008.”
Indeed, Deutsche Bank AG analysts in August said Credit Suisse faces a capital gap of at least 4 billion Swiss francs ($4 billion) to improve its financial strength, fund its restructuring and support growth.
--With assistance from Macarena Muñoz and Ksenia Galouchko.
This article was provided by Bloomberg News.