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Credit Suisse Convinces With Strong Wealth Management: Analysts
Credit Suisse Convinces With Strong Wealth Management: Analysts
25 Apr 2018, 06:01 PM IST
(Bloomberg) -- Credit Suisse shares gain the most in more than five months after first-quarter earnings beat estimates, with net new money coming in at CHF14.4b -- the highest quarterly level in seven years. A strong wealth management business offsets somewhat weaker equity trading revenue than reported by U.S. peers and UBS. Some analysts point out that consensus estimates have been lowered since a “soft profit warning” mid-March.
Vontobel, Andreas Venditti
(Hold, PT CHF17)
- Pretax profit above consensus, which has been lowered by almost a quarter since the “profit warning” of mid-March
- Adj. pretax in line with Vontobel estimate, represents only 26% of FY18E estimate
- As proportion of annual earnings made in 1Q is usually “way above” this level (1Q17: 35%), Vontobel might consider lowering its estimates
Goldman Sachs, Jernej Omahen and Marco di Matteo
(Buy, PT CHF 21.80)
- Good set of results, pretax profit beat, strong net new money; in investment banking, equities revenues underperformed U.S. peers and UBS
- All operating divisions better than expected except for IBCM
- CET1 ratio at 12.9% above consensus
Morgan Stanley, Magdalena Stoklosa
(Overweight, PT CHF20)
- Results strong in “absolute and relative” terms
- “Very strong” net new money across global wealth management, with margins up across all regions
- Costs reduced by 6% shows continued delivery and focus
Zuercher Kantonalbank, Javier Lodeiro
(Outperform)
- Most units have performed “surprisingly well”, mainly driven by lower costs
- Costs set to decline further, making net income less dependent on earnings growth
- Expect shares to outperform UBS
To contact the reporter on this story: Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.net.
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Paul Jarvis
©2018 Bloomberg L.P.
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