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Credit Suisse, BofA Cut Value Stocks on Doubt Over Returns

  • Value shares have outperformed growth this year as yields rose
  • Morgan Stanley sees era of value’s outperformance starting

After a major outperformance versus growth shares this year, value stocks are starting to lose their appeal as bond yields peak and economic recovery grinds to a halt, strategists at Credit Suisse Group Inc. and Bank of America Corp. warned. 

The two banks downgraded their recommendations on cheaper, so-called value shares on Friday, with Credit Suisse strategists cutting them to benchmark after having been overweight since May 2020, while BofA strategists slashed European value and bank stocks versus growth to underweight.