Credit Suisse Stock Lost 21% Last Week, What’s Next?

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Credit Suisse

Credit Suisse’s stock (NYSE: CS) has lost 21% in the last week, underperforming the S&P 500 by a huge margin (down 4.6%). Further, the same trend was observed over the last ten days (-24% vs -9.5%) and one month (-22% vs -11%). 

A big chunk of the recent stock decline came after Reuters reported on Friday (down 12%) that the company is looking to raise fresh capital to revamp its investment banking business. The report further suggests the firm is weighing different scenarios for the investment bank, including exiting the U.S. market. 

Before this, the bank posted weak results in the second quarter of 2022, with the net revenues decreasing 29% y-o-y to CHF 3.6 billion. It was primarily due to a decline in investment bank revenues driven by lower capital markets issuance activity and a drop in client activity levels. Further, the wealth management and asset management segments also posted negative growth. Overall, the pre-tax income was down from CHF 813 million to CHF -1.17 billion.

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Now, is CS stock set to drop further, or could we expect some recovery? We believe that there is an 83% chance of a rise in CS stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last ten years. See our analysis on Credit Suisse’s Stock Chance of Rise.

Twenty-One Day: CS -22%, vs. S&P500 -11%; Underperformed market

(2% likelihood event; 83% probability of rise over next 21 days)

  • Credit Suisse stock lost 22% over the last twenty-one trading days (one month), compared to a broader market (S&P500) decrease of 11%
  • A change of -22% or more over twenty-one trading days is a 2% likelihood event, which has occurred 54 times out of 2514 in the last ten years
  • Of these 54 instances, the stock has seen a positive movement over the next twenty-one trading days on 45 occasions
  • This points to a 83% probability for the stock rising over the next twenty-one trading days

Ten Day: CS -24%, vs. S&P500 -9.5%; Underperformed market

(less than 1% likelihood event; 67% probability of rise over next 10 days)

  • Credit Suisse stock decreased 24% over the last ten trading days (two weeks), compared to a broader market (S&P500) loss of 9.5%
  • A change of -24% or more over ten trading days is a less than 1% likelihood event, which has occurred 12 times out of 2515 in the last ten years
  • Of these 12 instances, the stock has seen a positive movement over the next ten trading days on 8 occasions
  • This points to a 67% probability for the stock rising over the next ten trading days

Five Day: CS -21%, vs. S&P500 -4.6%; Underperformed market

(less than 1% likelihood event; 43% probability of rise over next five days)

  • Credit Suisse stock lost 21% over a five-day trading period ending 09/23/2022, compared to the broader market (S&P500) decrease of 4.6%
  • A change of -21% or more over five trading days (one week) is a less than 1% likelihood event, which has occurred seven times out of 2215 in the last ten years
  • Of these seven instances, the stock has seen a positive movement over the next five trading days on three occasions
  • This points to a 43% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Sep 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 CS Return -20% -57% -71%
 S&P 500 Return -7% -23% 65%
 Trefis Multi-Strategy Portfolio -11% -25% 198%

[1] Month-to-date and year-to-date as of 9/26/2022
[2] Cumulative total returns since the end of 2016

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