UBS: Integration-Driven Profitability Upside and Capital Returns Support Buy Rating Through 2026

Bank of America Securities analyst Antonio Reale has reiterated their bullish stance on UBS stock, giving a Buy rating on January 15.

Antonio Reale has given his Buy rating due to a combination of factors that point to improving profitability and shareholder returns at UBS. He highlights that new medium‑term financial targets imply a strong underlying return on CET1 capital above 15% and a meaningful step-down in the cost/income ratio by 2026, underpinned by substantial progress on integrating Credit Suisse and extracting cost synergies. The planned share repurchases of about $6bn in 2026, with roughly half front‑loaded in the first half of the year, further support capital return and signal management confidence in earnings power. In his view, these dynamics position UBS as a core long-term holding and justify its inclusion among the firm’s top European stock ideas through 2026.

Reale also underlines that operating leverage should improve from the second quarter of 2026 as integration charges taper and run-rate costs decline, creating “positive jaws” where revenue growth outpaces expenses. On the revenue side, he expects continued strength in Global Wealth Management, with solid net inflows and market performance pushing invested assets toward the $5 trillion mark, driven particularly by robust client flows from Asia that more than offset ongoing outflows in the US. In Investment Banking, he anticipates another strong quarter supported by buoyant capital markets activity, ahead‑of‑plan wind-down of non‑core assets, and a healthy advisory pipeline, especially in Asia’s active IPO market. Taken together, his forecasts place UBS’s profitability and earnings above market expectations, supporting a higher price objective and underpinning the Buy recommendation.

According to TipRanks, Reale is a 5-star analyst with an average return of 21.8% and a 63.86% success rate. Reale covers the Financial sector, focusing on stocks such as UBS Group AG, Banco Santander, and Banco Bilbao Vizcaya Argentaria.

In another report released on January 15, TipRanks – Google also initiated coverage with a Buy rating on the stock with a CHF42.00 price target.