UBS Downgrades Neutral Rating, PT to $16.5 from $18.61

UBS Downgrades Neutral Rating, PT to $16.5 from $18.61

UBS Global Research has downgraded its rating on U.S. equities to Neutral from Attractive, citing reduced upside potential following an 11% rally in the S&P 500 since early April. The bank pointed to the temporary pause in tariffs and the recent market gains as factors contributing to the downgrade. UBS believes the easy gains are behind, and risk-reward in equities is now more balanced. Despite the downgrade, UBS emphasized it is not a bearish view and continues to advise a full strategic allocation to U.S. stocks, expecting equities to be higher 12 months from now. UBS's sector preferences remain unchanged, with Attractive ratings on communication services, tech, health care, and utilities. The durability of this rally will depend on whether U.S.-China negotiators can turn the temporary fix into a lasting trade agreement and how Beijing proceeds with anticipated stimulus.

In a separate move, UBS has also revised its price target for its own stock to CHF 32 from CHF 31.93, according to Deutsche Bank analyst Benjamin Goy. Goy cited UBS’s strong performance in the first quarter of 2025, which prompted a significant increase in earnings forecasts for the company. Despite the recent upgrades, Deutsche Bank’s forecasts and the updated target price remain below the levels seen before April 2, 2025. Goy highlighted UBS’s solid underlying performance, the prospect of gaining more clarity on capital requirements, and an attractive valuation as reasons for reiterating the Buy recommendation.

References:
[1] https://finance.yahoo.com/news/ubs-cuts-u-stocks-view-122302464.html
[2] https://za.investing.com/news/stock-market-news/ubs-downgrades-socgen-to-neutral-cites-valuation-after-strong-rally-3703509?utm_campaign=googlenews-za-stocks&utm_medium=feed&utm_source=googlenews
[3] https://www.investing.com/news/stock-market-news/ubs-cuts-us-stocks-view-after-11-rally-on-fading-trade-fears-4041574
[4] https://uk.investing.com/news/analyst-ratings/deutsche-bank-lifts-ubs-stock-price-target-to-chf32-from-chf31-93CH-4079771