Should you try to catch the falling Swiss knife?

People queue outside a currency exchange office in Geneva, January 16, 2015.
Pierre Albouy | Reuters
People queue outside a currency exchange office in Geneva, January 16, 2015.

Switzerland's stock market dived after its central bank de-pegged its currency from the euro, but it's not time to go bargain hunting yet, analysts said.

"Don't try to catch a falling knife," Societe Generale warned in a note Friday, advising instead that investors whose base currencies are the U.S. dollar or the euro should be taking profit. It cut its "already pessimistic" target for the SMI index to 7500 by year-end from 8500. On Monday, the SMI closed at 8152.78, up 3.2 percent from Friday's close, but still down over 11 percent from before the Swiss National Bank's (SNB) surprise move to end its more than three-year-old currency peg of 1.20 Swiss francs to the euro.

Combined with an interest rate cut deeper into negative territory – by 50 basis points to negative 0.75 percent – the move saw the Swiss franc surge against the euro and the dollar. After three years of hovering around 1.20 francs, the euro plunged Thursday, fetching as little as 0.8588 franc, although it's since recovered to around 1.02 francs in Asian trade Tuesday.

Read More A Swiss bombshell: Why the franc soared 30%

"Expect earnings momentum to be negative: first on exporters, which will immediately feel the pain of currency appreciation, and then on the domestics companies (including small caps) which will likely suffer from deflationary forces," Societe Generale said.

It also expects Swiss companies will begin slashing their dividend payouts from the current average 54 percent payout ratio, noting that the around 3 percent dividend yield had been a key draw for the market as its sovereign bond yields were negative.