UBS’s Big Stock Rally Has Much Further to Run, Jefferies Says
(Bloomberg) — UBS Group AG shares could scale peaks last seen in 2007, driven by the earnings power of the bank’s wealth management and investment banking franchises, according to Jefferies.
Analyst Joseph Dickerson raised his price target to 60 Swiss francs, the highest tracked by Bloomberg, while reiterating his buy recommendation. The new target implies roughly 50% upside from Wednesday’s close, which would take the stock near to pre-global financial crisis levels. It is up about 60% over the past 12 months.
Second-quarter results are likely to reinforce the broker’s high-conviction bullish view on the stock, Dickerson wrote in a note, citing continued momentum in the bank’s US wealth management operations, a standout performance at its Asian wealth business, and what he described as an investment-banking division “with the right mix.”
2026 is turning out to be a boom year for investment banks. US equity capital markets are digesting an unprecedented wave of new shares, driven by artificial intelligence names and SpaceX’s record debut. In mergers and acquisitions, Goldman Sachs Group Inc. has already advised on more than $1 trillion of deals, the fastest any bank has ever reached the milestone.
Dickerson said the first quarter was UBS’s most profitable on record in investment banking “and the backdrop remains very firm” with the bank active in ECM, notably in the US and Asia.
Still, UBS shares have lagged behind peers, gaining 11% so far this year and slightly trailing the Stoxx 600 Banks Index. Switzerland’s largest lender missed out on some of the gains other European banks experienced in recent years as uncertainty over stricter capital requirements dampened investor excitement.
Swiss lawmakers continue to discuss regulatory reforms following UBS’s emergency takeover of Credit Suisse in 2023.
Dickerson wrote that the outcomes for UBS range from a requirement for no additional Common Equity Tier 1 capital to a worst-case scenario in which it would need to raise a sum in the mid-single-digit billions of dollars. His assessment follows recent signs that Switzerland’s parliamentary debate may result in a more moderate path for capital regulation.
The stock’s current valuation of about 1.4 times Jefferies’ estimate for 2028 tangible book value fails to adequately reflect the range of potential outcomes, he added.
UBS shares rose as much as 2.1% in Zurich on Thursday to the highest level since February 2008.
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