UBS Group AG (UBSG) AI Stock Analysis

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UBS Group AG

(NYSE:UBSG)

Rating:73Outperform

Price Target:―

UBS Group AG's overall score reflects its strong financial health and moderate valuation, with potential for growth. While technical indicators suggest caution due to mixed signals, the company's earnings call highlighted key strengths in profitability and strategic initiatives. High leverage and sector-specific challenges remain as risks.

Positive Factors

Business Performance

Business performance is set to accelerate, with UBS expected to achieve RWA targets earlier than planned, allowing investors to focus on core business earnings.

Cost Savings

58% of gross cost savings have already been achieved, with the remaining savings expected from completing IT migration with simplified data and organizational structures.

Profit Growth

Global Wealth Management unit is expected to be a key driver of profit growth and return improvement, contributing significantly to group pre-tax earnings growth.

Negative Factors

Operational Risks

The core banking system integration poses significant risks, with potential operating headwinds due to IT challenges and near-zero interest rates.

Regulatory Challenges

UBS is expected to face a significant new capital need of approximately $20-25 billion, which could create an uneven playing field compared to its peers.

Regulatory Uncertainty

There is a possibility of a referendum which could delay or cancel the proposed regulatory changes, adding to the uncertainty.

UBS Group AG (UBSG) vs. iShares MSCI Switzerland ETF (EWL)

Market Cap

$85.62B

Dividend Yield2.55%

Average Volume (3M)6.24M

Price to Earnings (P/E)19.2

Beta (1Y)1.41

Revenue Growth-6.01%

EPS GrowthN/A

CountryCH

Employees106,789

SectorFinancial

Sector Strength83

IndustryBanks - Diversified

Share Statistics

EPS (TTM)0.42

Shares Outstanding3,341,581,800

10 Day Avg. Volume5,532,934

30 Day Avg. Volume6,238,801

Financial Highlights & Ratios

PEG Ratio7.16

Price to Book (P/B)1.15

Price to Sales (P/S)0.00

P/FCF Ratio19.23

Enterprise Value/Market Cap2.31

Enterprise Value/Revenue1.08

Enterprise Value/Gross Profit4.32

Enterprise Value/Ebitda5.77

Forecast

1Y Price Target

$30.79

Price Target Upside10.43% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

UBS Group AG Business Overview & Revenue Model

Company DescriptionUBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through four divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, and Investment Bank. The Global Wealth Management division offers investment advice and solutions, and lending solutions to ultra high net worth and high net worth clients. This segment also provides estate and wealth planning, investing, philanthropy, corporate and banking, and family advisory services, as well as mortgage, securities-based, and structured lending solutions. The Personal & Corporate Banking division provides personal banking products and services, such as deposits, cards, and online and mobile banking, as well as lending, investments, and retirement services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, trade and export finance, and global custody solutions, as well as transaction banking solutions for payment and cash management. The Asset Management division offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. The Investment Bank division advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; and offers clients differentiated content on major financial markets and securities. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is based in Zurich, Switzerland.

How the Company Makes MoneyUBS Group AG generates revenue through various key streams. The wealth management division is a significant contributor, earning fees from advisory services, portfolio management, and brokerage services. The investment banking division derives income from underwriting, advisory fees, trading, and capital markets activities. The asset management division earns fees from managing a wide range of investment products for institutional and individual clients. Retail banking services, primarily in Switzerland, provide additional revenue through traditional banking activities such as lending and deposit services. Strategic partnerships and collaborations with other financial institutions also enhance UBS's capabilities and revenue potential.

UBS Group AG Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 11.65%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with robust profit and inflows countered by flat revenue, lower net interest income, and challenges related to global tariffs and the Personal and Corporate Banking sector. While there were significant achievements in integration and cost savings, uncertainties in the broader economic environment and specific underperforming sectors were notable.

Q1-2025 Updates

Positive Updates

Strong First Quarter Profit

First quarter net profit reached $1.7 billion, and the return on CET1 capital was 11.3%, supported by positive operating leverage in core businesses.

Robust Net New Inflows

Net new inflows were strong, with $32 billion in Global Wealth Management and $7 billion in asset management.

Record Global Markets Performance

Global markets achieved its best quarter on record, with strong performance in equities and FX.

Progress in Credit Suisse Integration

Significant progress was made in integrating Credit Suisse, with over 1 million clients prepared to migrate to UBS platforms.

Capital Strength and Share Buyback

CET1 capital ratio stood at 14.3%, and a $3 billion share buyback plan was announced for 2025.

Cost Savings Achieved

An additional $900 million in gross run rate cost saves achieved, with a cumulative total of $8.4 billion since the end of 2022.

Negative Updates

Reduced Group Revenue

Group revenue was broadly flat at $12 billion, with a slight decrease in profit before tax by 1% year-on-year.

Lower Net Interest Income

Net interest income in Global Wealth Management decreased by 4% year-over-year and 7% quarter-over-quarter.

Challenges with Tariff Impact

The prospect of higher tariffs on global trade presents a material risk to global growth and inflation, causing uncertainty.

Pressure on Personal and Corporate Banking

The Personal and Corporate Banking division experienced a 23% decrease in pretax profit due to lower interest rates.

Non-Core and Legacy Unit Underperformance

Non-core and legacy unit reported a pretax loss of $200 million, with the expectation of further losses throughout the year.

Company Guidance

During the UBS First Quarter 2025 Results call, CEO Sergio Ermotti highlighted a robust net profit of $1.7 billion and an underlying return on CET1 capital of 11.3%. UBS saw $32 billion in net new assets in Global Wealth Management and $7 billion in Asset Management, reflecting strong asset gathering. The Investment Bank had a record quarter in global markets, while the CET1 ratio stood at 14.3%. UBS plans to continue its $3 billion share buyback, contingent on maintaining a CET1 capital ratio of around 14%. The group’s cost/income ratio was 77.4%, with a group profit before tax of $2.6 billion, despite a challenging market environment. Looking forward, UBS remains committed to executing its growth strategy while navigating ongoing market volatility.

UBS Group AG Financial Statement Overview

Summary

UBS Group AG exhibits a strong financial position with stable profitability and effective cash flow management. Despite high leverage, the company is well-positioned in the diversified banking sector with opportunities for growth.

Income Statement

Very Positive

UBS Group AG demonstrates strong profitability with a stable gross profit margin, despite a slight decrease in total revenue in TTM (Trailing-Twelve-Months). Notably, the net profit margin of 10.98% for TTM is commendable, indicating effective cost management. However, the revenue growth rate presents a minor concern with a slight decline compared to the previous year.

Balance Sheet

Positive

The balance sheet reflects solid equity with a debt-to-equity ratio of 3.85, which is relatively high, suggesting significant leverage. However, the equity ratio of 5.65% indicates a stable capital structure. UBS maintains a strong cash position, crucial for liquidity management in a diversified bank.

Cash Flow

Positive

The cash flow statement shows healthy free cash flow growth, supported by a robust operating cash flow to net income ratio of 1.42 for TTM. Despite a decrease in free cash flow in TTM, UBS's effective cash flow management ensures sufficient liquidity for operations and investments.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
45.76B	45.81B	39.06B	33.27B	35.06B	33.08B
	Gross Profit
45.76B	45.81B	39.06B	33.27B	35.06B	33.08B
	EBIT
4.88B	0.00	0.00	16.14B	9.46B	8.21B
	EBITDA
6.79B	0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
5.02B	5.09B	27.85B	7.63B	7.46B	6.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
237.04B	225.52B	329.38B	171.68B	203.64B	166.49B
	Total Assets
1.54T	1.57T	1.72T	1.10T	1.12T	1.13T
	Total Debt
336.14B	332.42B	366.11B	193.28B	218.64B	200.47B
	Net Debt
102.32B	106.72B	60.47B	20.45B	23.84B	42.24B
	Total Liabilities
1.46T	1.48T	1.63T	1.05T	1.06T	1.07T
	Stockholders Equity
87.19B	85.08B	86.11B	56.88B	60.66B	59.52B
Cash Flow		Free Cash Flow
4.96B	1.27B	84.38B	13.00B	29.58B	35.10B
	Operating Cash Flow
7.11B	3.28B	86.07B	14.65B	31.43B	36.96B
	Investing Cash Flow
-7.77B	709.00M	103.23B	-12.45B	-2.12B	-6.79B
	Financing Cash Flow
-46.30B	-84.17B	-58.26B	-9.09B	10.35B	12.43B

UBS Group AG Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.88

Price Trends

50DMA

25.50

Positive

100DMA

27.39

Positive

200DMA

26.91

Positive

Market Momentum

MACD

0.38

Negative

RSI

62.99

Neutral

STOCH

69.66

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:UBSG, the sentiment is Positive. The current price of 27.88 is above the 20-day moving average (MA) of 26.93, above the 50-day MA of 25.50, and above the 200-day MA of 26.91, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 62.99 is Neutral, neither overbought nor oversold. The STOCH value of 69.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:UBSG.

UBS Group AG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UBSG	73 Outperform	$85.62B	19.21	5.83%	2.55%	-6.01%	―
PGHN	71 Outperform	CHF28.43B	24.88		3.87%	9.45%	12.15%
BAER	66 Neutral	CHF10.34B	10.54		4.96%	7.69%	126.15%
Sector *	64 Neutral	$12.85B	9.81	7.59%	16985.65%	12.30%	-7.71%
EFGIF		$5.56B	15.62	13.89%	3.87%	―	―
VONHF		$4.28B	14.14	12.22%	4.47%	―	―
SQN		CHF7.24B	24.79		1.23%	―	―

* Financial Sector Average

Performance Comparison

CH:UBSG

UBS Group AG

27.88

0.73

2.68%

CH:PGHN

Partners Group Holding AG

1,080.00

-36.88

-3.30%

CH:BAER

Julius Baer Group Ltd

52.76

4.19

8.63%

EFGIF

EFG International AG

17.76

3.93

28.42%

VONHF

Vontobel Holding AG

77.00

20.92

37.30%

CH:SQN

Swissquote Group Holding Ltd.

484.00

195.92

68.01%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.