UBS posts $1.14 billion profit in second quarter, smashing expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 14 2024
0mins
Should l Buy UBS?
Strong Q2 Performance: UBS reported a net profit of $1.136 billion for the second quarter, significantly exceeding expectations of $528 million, although lower than the previous quarter's profit of $1.755 billion.
Revenue Growth: Group revenue reached $11.904 billion, surpassing forecasts, driven by a 15% increase in global wealth management and a 38% rise in investment banking revenues.
Impact of Credit Suisse Merger: The integration of Credit Suisse contributed to revenue growth, with UBS completing the merger process and expecting cumulative gross savings of $7 billion by the end of 2024.
Market Outlook Concerns: UBS expressed concerns about ongoing geopolitical tensions and upcoming US elections, predicting continued market volatility in the near future.
Cost-Cutting Measures: As part of the merger, UBS has implemented job cuts and reduced risk-weighted assets, now targeting $7 billion in cost savings by the end of 2024.
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Analyst Views on UBS
Wall Street analysts forecast UBS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for UBS is 45.75 USD with a low forecast of 37.61 USD and a high forecast of 60.17 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
8 Buy
2 Hold
3 Sell
Moderate Buy
Current: 43.910
Low
37.61
Averages
45.75
High
60.17
Current: 43.910
Low
37.61
Averages
45.75
High
60.17
About UBS
UBS Group AG is a Switzerland-based holding company and conducts its operations through UBS AG and its subsidiaries. The company operates as a wealth manager with focused asset management and investment banking capabilities and a capital-light and cash-generative business model. The Company comprises four business divisions: Global Wealth Management, which provides tailored advice and solutions to its clients around the globe; Personal & Corporate Banking division provides comprehensive financial products and services to private, corporate and institutional clients in Switzerland; Asset Management division offers investment capabilities and styles across all traditional and alternative asset classes, as well as advisory support to institutions; Investment Bank provides investment advice, financial solutions and capital markets access to institutional, corporate and wealth management clients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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UBS Profitability Goals: UBS aims to enhance the profitability of its Americas unit in 2025 and continue this focus into 2026.
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- Future Expectations: Analysts forecast revenues of $51.1 billion in 2026, reflecting a 4.1% growth rate, but this is a downgrade from the previous expectation of $51.9 billion, suggesting a cautious outlook on the company's future performance.
- Earnings Forecast Adjustment: Expected earnings per share are projected to rise by 24% to $3.11, yet the downgrade in future earnings estimates indicates a clear shift to negative sentiment in the market, impacting investor confidence.
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- Guidance Adjustment: The company revised its sales forecast for FY2026 downwards, now projecting net sales between $2.41 billion and $2.46 billion, while also adjusting its EBITDA outlook to between $425 million and $440 million, demonstrating a cautious stance on future performance.
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