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UBS Acquires Wealthfront for $1.4B, Expands US Presence

Switzerland-based investment banking and financial services firm UBS Group AG (NYSE: UBS) has signed an agreement to acquire California-based automated wealth management solutions provider Wealthfront for $1.4 billion in cash.

The acquisition will help UBS boost growth in the U.S. as well as expand its distribution and capabilities.

Ralph Hamers, the Group CEO of UBS, said, “Wealthfront complements our core business in the U.S. providing wealth management to high net worth and ultra-high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”

Wealthfront’s prime focus is on millennial and Gen Z investors, and it manages over $27 billion in assets of more than 470,000 clients in the U.S. Its offerings include Workplace Wealth Solutions for businesses and Wealth Advice Center for affluent clients.

Following the completion of the acquisition, which is expected in the second half of this year, Wealthfront will operate as a wholly-owned subsidiary of UBS Global Wealth Management Americas.

About UBS

Headquartered in Zurich, UBS offers wealth management, personal & corporate banking, asset management, and investment banking services to private, institutional and corporate clients across the world.

The company’s shares closed nearly 1% up on Wednesday. However, they were trading 0.4% down in the pre-market session on Thursday, at the time of writing.

Wall Street’s Take

Recently, Jefferies (NYSE: JEF) analyst Flora Bocahut maintained a Buy rating on the stock with a price target of $24.89 (32.4% upside potential).

Additionally, Benjamin Goy of Deutsche Bank (NYSE: DB) reiterated a Buy rating on UBS with a $23.81 price target (26.6% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 9 Buys and 2 Holds. The average UBS price target of $22.58 implies 20.1% upside potential. Shares have gained 27.4% over the past year.

Smart Score

UBS scores a “Perfect 10” on TipRanks’ Smart Score rating system. This implies that the stock has strong potential to outperform market expectations, making it one of the best growth stocks for 2022.

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