($CS) Credit Suisse Group Trades at a Discount to the Overall Market

September 5th, 2009

Credit Suisse Group (CS) has posted huge gains over the last 4 months as the financial sector has recovered from a virtual near-death experience.

Company Description

Credit Suisse Group AG, together with its subsidiaries, operates as a financial services company worldwide. The company was founded in 1856 and has a market cap of $57 billion.

The global financial sector is mending, with many companies purging the toxic assets that were plaguing their balance sheets and crimping income. Business activity has also picked up, stimulating demand for financial services, another dynamic that helped Credit Suisse post solid second-quarter results on July 23.

Second-Quarter Results

Sales were up 11% from last year to $8.12 billion. Earnings came in much better than expected at $1.38 per share, 81 cents ahead of the Zacks Consensus Estimate.

It was a much welcomed return to profitability for the financial heavyweight, which suffered its worst loss in its 158-year history in 2008. The company noted that a strong performance from its investment banking division drove its results.

Estimates Jump

Estimates have been rising aggresively as the outlook in the financial sector has improved. The current-year estimate is up to $4.41 per share from $2.67 90 days ago.

Valuation

Based upon this earnings estimate, this stock trades at a discount to the overall market with a P/E of 11X compared to 17.5X.

The Chart

Shares have been rallying big since early March, jumping from less than $20 to a recent high above $52. Take a look at the nice move below.

Zacks Investment Research
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Read more on Credit Suisse Group at Wikinvest

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