UBS Maintains Buy Rating, Raises PT to $47 from $42

UBS Maintains Buy Rating, Raises PT to $47 from $42

UBS Group AG (UBS) has maintained its buy rating while increasing its price target to $47 from $42, according to recent market analysis. The decision was based on a series of strong financial performances and strategic moves that have bolstered the company's growth prospects.

UBS shares touched a new 52-week high of $39.71 during last Friday's trading session, closing at $39.54. Over the past three months, UBS shares have gained 21.7%, outperforming the industry’s 12.3% growth. This performance is attributed to robust second-quarter 2025 results, with net profit attributable to shareholders surging to $2.39 billion from $1.14 billion a year earlier [2].

The company's strategic expansion and partnerships have also played a significant role in its recent momentum. UBS has expanded its global presence through strategic partnerships and acquisitions, including a deal with 360 ONE WAM Ltd in April 2025 and the acquisition of Credit Suisse in June 2023. These moves have enhanced its wealth and asset management capabilities and strengthened its capital-light businesses [2].

UBS's strong capital position is another key factor supporting its growth prospects. As of June 30, 2025, its CET1 capital ratio stood at 14.4%, well above management guidance. The company aims to achieve an underlying return on CET1 capital of approximately 15% by 2026-end and 18% by 2028-end, indicating a solid financial foundation for future growth [2].

The company's revenue growth has been consistent, with overall revenues registering a three-year (2021–2024) CAGR of 11%. Net interest income (NII) and fee income have also shown robust growth, with NII growing at a 4.9% CAGR and fee income at an 8% CAGR. These dynamics reflect UBS's balanced revenue mix and are expected to continue fueling growth in the coming quarters [2].

Despite these positive indicators, UBS faces near-term concerns over elevated expenses and its capital distribution strategy. Operating expenses have registered a 14.3% CAGR over the past four years, driven by integration costs and technology investments. Continued investments in digital infrastructure and integration costs are expected to keep the expense base elevated in the near term, potentially hindering bottom-line growth [2].

In conclusion, UBS's strong financial performance and strategic moves have led to a positive outlook, with the company maintaining its buy rating and raising its price target to $47. However, investors should be mindful of the potential challenges posed by elevated expenses and the company's capital distribution strategy.

References:
[1] https://stockinvest.us/stock/UBS
[2] https://www.nasdaq.com/articles/ubs-group-touches-52-week-high-should-you-buy-stock-now