United Therapeutics: UBS Reiterates Buy Rating, PT Raised to $415 from $385

United Therapeutics: UBS Reiterates Buy Rating, PT Raised to $415 from $385

UBS Group AG (UBS) received a positive update from analysts at Zacks Investment Research, who reiterated their buy rating on the stock and raised their price target to $415 from $385. The latest recommendation comes amid strong financial performance and strategic initiatives that have bolstered UBS's market position.

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 driven by robust earnings and strategic expansion efforts, including the successful integration of Credit Suisse [1].

The recent rally reflects UBS's strong second-quarter 2025 performance, with net profit attributable to shareholders surging to $2.39 billion from $1.14 billion a year earlier. Revenue increased by 1.7% year over year to $12.11 billion, while operating expenses fell by 5.6% to $9.75 billion [1]. These improvements highlight UBS's progress in achieving its cost-saving goals from the Credit Suisse merger.

UBS has also expanded its global presence through strategic partnerships and acquisitions. In April 2025, it partnered with 360 ONE WAM Ltd, India's leading wealth and asset manager, and in June 2023, it completed the acquisition of Credit Suisse. These moves are expected to strengthen UBS's wealth and asset management capabilities and enhance its capital-light businesses [1].

Despite these positive developments, UBS faces operational challenges such as rising expenses and concerns over its capital distribution strategy. Operating expenses have registered a 14.3% CAGR over the past four years, driven by integration costs and technology investments [1]. Additionally, UBS's debt-to-equity ratio of 3.77 is well above the industry average of 0.87, raising questions about the sustainability of its capital distributions [1].

However, UBS's solid capital position and consistent revenue growth provide a strong foundation for future growth. The company maintains a robust CET1 capital ratio of 14.4% and aims to achieve an underlying return on CET1 capital of approximately 15% by 2026-end and 18% by 2028-end [1]. UBS's strategic partnerships, ongoing digital transformation, and disciplined cost-saving efforts further enhance its competitive advantage.

In conclusion, while UBS faces operational challenges, its strong financial performance and strategic initiatives position it well for long-term growth. The buy rating and price target raise from Zacks Investment Research reflect the positive outlook on UBS's future prospects.

References:
[1] https://www.barchart.com/story/news/34054758/ubs-group-touches-52-week-high-should-you-buy-the-stock-now