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EFG International (EFGXY)
OTHER OTC:EFGXY
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EFG International
(OTC:EFGXY)
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Rating:64Neutral
Price Target:
$26.00
▲(4.75% Upside)
Action:ReiteratedDate:03/02/26
The score is driven primarily by financial quality concerns from sharply negative operating/free cash flow despite solid revenue growth and balance-sheet metrics. Offsetting this, the latest earnings call was notably constructive with clear growth/efficiency targets, record operating results, and strong capital returns. Technical signals are neutral-to-weak and valuation is reasonable but not a major tailwind.
Positive Factors
Record AUM and sustained net new assets
Record AUM and the strongest NNA since the global financial crisis increase the durable fee base and scale economics for private banking. Higher AUM supports recurring management and commission revenues, enhances cross-sell potential, and underpins multi-year revenue targets and margin stability.
Improving operating efficiency and cost discipline
Sustained efficiency gains (CHF66m delivered and CHF70–80m target) and materially lower cost-to-income provide structural margin uplift. Persistent cost discipline increases operating leverage, freeing capital for growth or shareholder returns and lowering long-term earnings volatility.
Strong capital and liquidity position and shareholder returns
Robust CET1 and ample liquidity create a durable buffer to absorb shocks, support targeted M&A and underwrite consistent dividends and buybacks. Strong capital-generation metrics increase strategic optionality and reduce solvency risk over the medium term.
Negative Factors
Sharply negative operating and free cash flow
A sudden deterioration to negative operating and free cash flow in 2024–2025 undermines earnings quality and indicates weaker cash conversion. Persistent negative cash flow constrains flexibility for buybacks, M&A, or buffer replenishment and could increase reliance on external funding if not reversed.
Legacy litigation creates earnings and capital uncertainty
The sizeable legacy provision and an active UK trial introduce non-operational risk that can produce episodic P&L or capital hits. Extended legal exposure raises compliance and reputational costs, reducing predictability of future earnings and complicating capital planning until fully resolved.
Acquisition integration drag and CET1 impact
Rapid M&A added scale but caused short-term P&L drag and a ~130bp CET1 reduction, increasing leverage and capital strain. Realizing synergies is necessary for accretion; execution and integration risk could constrain capital deployment and elevate funding risk over the medium term.
EFG International (EFGXY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.24B
Dividend Yield3.05%
Average Volume (3M)0.00
Price to Earnings (P/E)10.6
Beta (1Y)0.76
Revenue Growth2.09%
EPS Growth24.41%
CountryUS
Employees3,114
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)0.43
Shares Outstanding307,100,200
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio5.31
Price to Book (P/B)1.38
Price to Sales (P/S)1.33
P/FCF Ratio-2.30
Enterprise Value/Market Cap0.19
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit0.61
Enterprise Value/Ebitda10.84
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
EFG International Business Overview & Revenue Model
Company DescriptionEFG International AG, together with its subsidiaries, provides private banking, wealth management, and asset management services. It offers investment solutions, including discretionary mandates, structured products, trading services, and Islamic solutions; wealth and trust services; credit and financing services, such as property and investment finance; and eBanking services, including mobile banking and security services. The company also provides other banking services consisting of custody, foreign exchange and treasury, and trading services, as well as accounts and cards; and supports independent asset managers to set up private label funds. It operates in Europe, Asia Pacific, the Americas, and the Middle East. EFG International AG was founded in 1995 and is headquartered in Zurich, Switzerland.
How the Company Makes MoneyEFG International makes money primarily through its wealth management and asset management services. The company's revenue model is based on fees and commissions earned from managing client assets and providing investment advice. Key revenue streams include management fees charged on assets under management (AUM), transaction fees for executing trades on behalf of clients, and advisory fees for personalized financial planning and investment strategies. EFG International also benefits from interest income generated through its banking operations. Strategic partnerships with other financial institutions and a focus on high-net-worth clients contribute significantly to its earnings.
EFG International Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operating and financial performance for 2025: record AUM, record IFRS net profit and EPS, robust revenue and commission margin expansion, meaningful cost savings and strong capital generation. Management highlighted sustained organic growth complemented by targeted M&A, prudent derisking of legacy life insurance exposures and clear efficiency programs. The principal negatives are legacy litigation (a CHF 59m provision in H2 and an ongoing UK trial with verdict expected summer 2026), muted life insurance contributions and currency/interest‑rate headwinds that introduce some volatility. Overall, the operational momentum, record metrics and clear mitigation actions for legacy items outweigh the remaining risks.Q4-2025 Updates
Positive Updates
Record Assets Under Management and Strong Net New Assets
AUM reached a record CHF 185.0 billion, up ~12% year‑on‑year (from CHF 165.5bn). Net new assets (NNA) were CHF 11.3 billion, +6.8% YoY — the highest nominal NNA since the global financial crisis and an acceleration in Q4.
Record Revenues and Operating Profitability
Operating performance was near CHF 493 million, a +26% YoY increase. Revenue growth was +11% for the year (or +8% excluding exceptionals). Core private banking operating profit was CHF 425 million, +18% YoY.
Record IFRS Net Profit, EPS and ROTE
IFRS net profit was a record CHF 325 million (CHF 339m ex-exceptionals, +6% YoY). EPS was CHF 1.03 (highest ever) and return on tangible equity exceeded 18%.
Revenue Margin Resilience and Commission Momentum
Revenue margin improved (full‑year metrics cited: 98 bps vs 96 bps prior year; H2 run‑rate at c.93 bps). Commission income (high‑quality revenue) grew +17% and commission margin expanded; mandate penetration reached 67% (target 65–70%).
Sustained Cost Discipline and Efficiency Gains
Headline cost‑to‑income improved to ~69.8% (from ~84% in 2019). Like‑for‑like operating expenses rose ~3.7% (nominal +6% including acquisitions). FTEs fell on a comparable basis (3,114 to 3,037, ~80 FTE reduction). Simplicity program delivered CHF 66m of savings (above initial CHF 40–60m target); new 2026–28 program targets CHF 70–80m.
Strong Capital, Liquidity and Shareholder Returns
CET1 was 14% reported (effectively ~14.4% pro forma considering Tier 1 instrument unwind). Gross capital generation exceeded 500 bps during the year; net capital generation ~1.6% after RWA and dividends. LCR ~270%, liquid assets >CHF 18bn. Proposed record dividend CHF 0.65 per share (fifth consecutive increase) and ongoing share buyback program (11.8m shares bought in 2025; up to 9m shares to be acquired to July 2027).
Successful M&A Complementing Organic Growth
Three acquisitions announced/closed in 12 months totalling ~CHF 16bn AUM (two included in 2025 numbers contributed ~CHF 12bn). Acquisitions equated to roughly one year of NNA and strengthen strategic footprint (Quilvest adds ~CHF 4bn when closed).
Commercial Execution: CRO Hiring and Productivity
Total CROs at 763. Hires/signed in 2025: 79 (51 hired + 28 signed). AUM per CRO on a like‑for‑like basis ~CHF 363 million (CHF 342m including acquisitions). NNA composition returned to ~65% from new CROs / ~35% from existing CROs.
Derisking of Legacy Insurance Portfolio
Life insurance exposure reduced: carrying value down to ~CHF 260 million (from CHF 360m at end‑2024 and >CHF 500m at cycle start), indicating ongoing derisking and lower expected future contribution from this legacy area.
Negative Updates
Legacy Litigation and One‑off Provision
A litigation provision of CHF 59 million was taken in H2 2025 (legacy case dating ~15–20 years) while an insurance recovery of CHF 45m occurred in H1, netting to a CHF 14m drag on reported P&L. The major UK trial (plaintiff PIFSS) has been running; verdict expected around summer 2026, leaving residual legal risk and uncertainty.
Muted Contribution from Life Insurance
Life insurance contribution materially lower in 2025 versus 2024 (2024 contribution cited at CHF 32m). Management expects lower ongoing contributions and some volatility while derisking continues.
Currency Headwinds and Interest‑Rate Sensitivities
A weaker US dollar and declining interest rates were cited as headwinds in 2025 and potential ongoing challenges in 2026. Sensitivity shown: a uniform 100bp drop across four major currencies would reduce revenues by CHF 36m; management expects the near‑term hit to be modest (order of ~1bp to revenue margin in 2026) but FX translation impacted capital ratios during the year.
Short‑term Acquisition Drag and Integration Work
Two 2025 acquisitions had a small negative P&L impact in 2025 due to acquisition costs and limited months of inclusion; integration and realization of synergies are required for the acquisitions to be accretive in 2026 and beyond (acquisitions reduced CET1 by ~130 bps).
Ongoing Legal and Litigation Costs
Despite progress, legal and litigation fees persist as a line item and remain a source of P&L and operational noise until legacy cases are fully resolved.
Company Guidance
Guidance for 2026–28 emphasises continued organic and M&A-driven growth with clear numeric targets: net new assets 4–6% p.a., a revenue margin in excess of 85 bps (FY 2025 was 98 bps, H2 93 bps), a cost-to-income ratio around 68% (headline 2025 was 69.8%), and a return on tangible equity target of 20% (management also cites ~15% annual net‑profit growth aspiration and a “double‑digit” / ~15% net profit CAGR). Management starts 2026 with CHF 185bn AUM (average 2025 CHF 170bn), CHF 11.3bn NNA in 2025 (6.8% YoY), operating income ~CHF 493m (+26% YoY), core private‑bank operating profit CHF 425m (+18%), IFRS net profit CHF 325m (CHF 339m excl. exceptionals), EPS CHF 1.03 and RoTE >18%. Efficiency and capital metrics: Simplicity savings achieved CHF 66m (new 2026–28 programme target CHF 70–80m), gross capital generation >500 bps (net +1.6% in 2025), CET1 ~14–14.4% (target corridor 12–15%), LCR 270%, buyback up to 9m shares to July 2027, and proposed dividend CHF 0.65/share. Operational levers called out include mandate penetration 67%, commission margin 46 bps (+17% commission income), CRO hiring target ~50–70 p.a., and a reported interest‑rate sensitivity of ~CHF 36m revenue per 100 bp move across major currencies (management expects only marginal NII pressure in 2026).EFG International Financial Statement Overview
Summary
Income statement and balance sheet are solid (strong revenue growth, healthy ROE, moderate leverage), but this is outweighed by very weak recent cash generation: operating and free cash flow turned sharply negative in 2024–2025, raising earnings-quality and funding-flexibility risk.Income Statement
Top-line momentum is strong, with 2025 revenue up sharply versus 2024 (after a small increase in 2024 and a decline in 2023). Profitability is solid but has weakened from the prior year: net margin fell meaningfully in 2025 versus 2024, and net income also dipped despite higher revenue. Overall, the income statement shows good growth but less consistent margin performance year-to-year.71
Positive
Balance Sheet
Leverage looks moderate for the period shown, with debt-to-equity remaining relatively low to mid-range, though it has risen in 2024–2025 versus 2022–2023. Shareholders’ equity has been stable to slightly higher, while total assets have been broadly stable with some fluctuation. Returns on equity are consistently healthy (roughly low-to-mid teens recently), supporting a solid balance-sheet score, tempered by the trend of rising leverage.74
Positive
Cash Flow
Cash generation is the main weakness. Operating cash flow is volatile and has turned sharply negative in 2024 and especially 2025, following a very strong 2022 and a positive 2023. Free cash flow is also deeply negative in 2024–2025, and the decline in free cash flow in 2025 is significant, raising questions about earnings quality and near-term funding flexibility despite reported profitability.32
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.48B | 1.50B | 1.43B | 1.56B | 1.26B |
| Gross Profit | 1.66B | 1.50B | 1.44B | 1.27B | 1.25B |
| EBITDA | 376.96M | 0.00 | 0.00 | 319.80M | 327.70M |
| Net Income | 310.58M | 321.60M | 303.20M | 202.40M | 205.80M |
Balance Sheet | |||||
| Total Assets | 39.44B | 40.60B | 38.59B | 43.54B | 42.14B |
| Cash, Cash Equivalents and Short-Term Investments | 5.05B | 8.01B | 6.66B | 11.23B | 12.08B |
| Total Debt | 743.94M | 440.00M | 239.00M | 243.70M | 475.20M |
| Total Liabilities | 37.05B | 38.22B | 36.37B | 41.47B | 39.85B |
| Stockholders Equity | 2.39B | 2.38B | 2.22B | 2.06B | 2.25B |
Cash Flow | |||||
| Free Cash Flow | -1.43B | -445.50M | 479.50M | 3.06B | -597.90M |
| Operating Cash Flow | -1.39B | -397.10M | 480.00M | 3.10B | -590.10M |
| Investing Cash Flow | 746.20M | 484.00M | -1.22B | -1.93B | -659.80M |
| Financing Cash Flow | 42.40M | 41.10M | -3.39B | -432.70M | 1.95B |
EFG International Technical Analysis
Neutral
24.82
Price Trends
24.71
Negative
23.13
Positive
21.14
Positive
Market Momentum
-0.25
Positive
37.87
Neutral
45.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EFGXY, the sentiment is Neutral. The current price of 24.82 is above the 20-day moving average (MA) of 24.49, above the 50-day MA of 24.71, and above the 200-day MA of 21.14, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 37.87 is Neutral, neither overbought nor oversold. The STOCH value of 45.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EFGXY.
EFG International Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $2.03B | 8.94 | 21.45% | 3.70% | -0.09% | 18.47% | |
71 Outperform | $75.40B | 11.24 | 11.70% | 4.14% | 2.20% | -0.17% | |
70 Outperform | $15.36B | 11.73 | 15.94% | 2.08% | 3.87% | 14.61% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $7.24B | 10.62 | 19.05% | 3.05% | 2.09% | 24.41% | |
60 Neutral | $77.82B | 11.28 | 10.00% | 1.71% | 17.50% | 49.25% | |
58 Neutral | $62.42B | 4.48 | 15.42% | 3.67% | 7.43% | 30.31% |
* Financial Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.