Analyst Giulia Miotto of Morgan Stanley maintained a Sell rating on UBS Group AG, retaining the price target of CHF28.00.
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Giulia Miotto’s rating is based on a combination of factors that highlight both the positive and negative aspects of UBS Group AG’s recent performance. Despite a strong third-quarter showing with a 24% beat on underlying profit before tax and revenues exceeding expectations by 5%, there are concerns that temper the outlook. The bank’s capital position was better than anticipated, but the lack of updated guidance despite these strong results raises questions about future performance.
Moreover, ongoing legal proceedings related to the write-down of Credit Suisse’s AT1 bonds add a layer of uncertainty. UBS’s involvement in the appeal process, which could take years to resolve, creates potential liabilities that could impact the bank’s financial standing. This uncertainty, coupled with a cautious outlook for the next quarter due to expected declines in CET1 capital, contributes to the Sell rating as investors may find these risks unappealing in the current market environment.
Miotto covers the Financial sector, focusing on stocks such as UBS Group AG, KBC Group SA/NV, and ING GROEP. According to TipRanks, Miotto has an average return of 14.7% and a 66.67% success rate on recommended stocks.