UBS Group AG, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Antonio Reale from Bank of America Securities upgraded the rating on the stock to a Hold and gave it a CHF31.00 price target.
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Antonio Reale has given his Hold rating due to a combination of factors that highlight both opportunities and challenges for UBS Group AG. The bank has shown potential for earnings per share growth, expected to continue until 2028, and has managed to reveal and adjust to capital headwinds, which has led to a reset in buyback expectations. Despite being one of the poorer performers compared to its EU banking peers year-to-date, the risks seem to be priced into the current share value, suggesting a stable range until new targets are presented in late 2025.
Moreover, UBS has avenues to mitigate some challenges, such as generating significant organic capital from 2026 and exploring disposals of foreign operations to optimize its holdings. The management’s strategy to enhance its capital-light investment banking model and the potential for rationalization could also play a role in improving its valuation. The consensus has adjusted buyback expectations, and the longer grand-fathering period for capital requirements provides some downside protection. Overall, while there are positive trends in certain operational areas, the mixed outlook justifies a Hold rating.
In another report released on July 18, Citi also maintained a Hold rating on the stock with a CHF28.30 price target.
Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UBS in relation to earlier this year.