UOB, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Wee Kuang Tay from CGS International reiterated a Hold rating on the stock and has a S$38.70 price target.
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Wee Kuang Tay has given his Hold rating due to a combination of factors, including persistent net interest margin pressure that is expected to weigh on UOB’s near-term earnings and keep 1Q26 profitability below last year’s level. While the bank’s ongoing share buyback programme helps cushion earnings per share and supports return on equity, it is not sufficient to offset the impact of softer net interest income and normalising fee trends.
At the same time, operating costs and credit expenses are projected to edge higher as management stays prudent in light of a more uncertain macroeconomic backdrop, which caps upside to earnings and justifies only modest earnings forecast downgrades. Given these headwinds, along with a slightly reduced target price derived from a GGM framework, Tay sees the risk‑reward as balanced, with potential upside dependent on lower-than-expected credit costs or stronger growth in fee income, particularly from wealth management, while weaker ASEAN growth or further margin compression remain key downside risks.