Analyst Antonio Reale of Bank of America Securities maintained a Sell rating on UBS Group AG (UBS – Research Report), retaining the price target of CHF28.00.
Antonio Reale’s rating is based on a combination of factors that suggest caution for UBS Group AG’s stock. Despite UBS’s solid performance in the first quarter, with a significant pre-tax profit beat driven by strong results in Global Wealth Management and Investment Banking, there are concerns about the future outlook. The Swiss Parliament’s upcoming proposal on the treatment of foreign subsidiaries introduces uncertainty, which could impact UBS’s strategic operations.
Additionally, while UBS has shown robust capital repatriation and plans for share buybacks, the maintenance of these actions is contingent on meeting certain capital targets and the absence of regulatory changes. The potential for a decline in net interest income in the Global Wealth Management unit and the need to maintain a strong CET1 ratio further contribute to the cautious stance. These factors combined lead to the maintenance of an Underperform rating, reflecting concerns over the sustainability of current performance levels in light of potential regulatory and market challenges.
Based on the recent corporate insider activity of 14 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.