Market Overview

Credit Suisse's Top 10 Financial Stocks

Credit Suisse's Top 10 Financial Stocks

The Financial sector has been one of the worst-performing market sector in 2015, and the Financial Select Sector SPDR ETF (NYSE: XLF) has fallen 6.6 percent versus the S&P 500’s 3.8 percent decline year-to-date. For the first time in two months, Credit Suisse analysts have updated their top Financial stock picks in 10 different subsectors, although the firm hasn’t made a single change to its top picks from August.

Here’s a full list of the names they chose.

1. Asset Managers: Affiliated Managers Group Inc (NYSE: AMG)

Analyst Craig Siegenthaler like the company’s “robust” deal pipeline and expects that buybacks will continue to support share price.

2. Large-Cap Banks: JPMorgan Chase & Co (NYSE: JPM)

Analyst Susan Katzke sees continuing fundamental outperformance from JP Morgan and praises the company’s “willingness to optimize its balance sheet and capital deployment.”

Related Link: Credit Suisse's Top 8 Energy Stocks: Schlumberger Out, Franks In

3. Mid-Cap Banks: KeyCorp (NYSE: KEY)

Analyst Jill Shea predicts that the company will return 94 percent of capital to shareholders in 2015 and forecasts 4 percent operating EPS growth.

4. Brokers, Exchanges & Alternative Asset Managers: Charles Schwab Corp (NYSE: SCHW)

Analyst Christian Bolu sees up to 30 percent earnings accretion from the company over the next two to three years even if interest rates remain at current levels, which seems like an overly cautious forecast.

5. Insurance-FG & Life: MetLife Inc (NYSE: MET)

Analyst Tom Gallagher believes the stock is currently undervalued “given improved visibility on capital returns and continuation of organic growth in international markets.”

6. Insurance-P&C: Allstate Corp (NYSE: ALL)

Analyst Ryan Tunis sees a potential sale of the runoff life business funding $1.5 billion in share buybacks.

7. Mortgage REITs: PennyMac Mortgage Investment Trust (NYSE: PMT)

Analyst Doug Harter sees an “attractive risk reward opportunity” given that the REIT is trading at a 22.1 percent discount to book value and pays a 11.7 percent dividend.

8. REITs: Simon Property Group Inc (NYSE: SPG)

Analyst Ian Weissman argues that the REIT “should trade at a premium to peers given its solid portfolio, strong balance sheet, and distinguished management team.”

9. Specialty Finance: Discover Financial Services (NYSE: DFS)

Analyst Moshe Orenbuch sees the company as “the best combination of strong operating fundamentals and valuation among the large card issuers.”

10. Trust Banks, M&A Advisors & Market Technology: Investment Technology Group Inc (NYSE: ITG)

Analyst Ashley Serrao believes that “the firm is cyclically well-positioned to succeed in Europe” and feels that the next major catalyst for the stock could be the selection of a new CEO.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for JPM

Apr 2019MaintainsOverweightOverweight
Apr 2019MaintainsOutperformOutperform
Apr 2019MaintainsMarket PerformMarket Perform

View More Analyst Ratings for JPM
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