UBS Downgraded to Neutral by BofA due to Credit Suisse Integration Costs
December 6, 2023
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It is also one of the largest asset management firms in Europe, with a wide range of services for private, corporate, and institutional clients. As a result of these factors, BofA has downgraded its recommendation on UBS ($NYSE:UBS) Group from Buy to Neutral. Analysts have expressed concern that the higher integration costs could put a strain on UBS’s balance sheet and lead to a deterioration in the company’s financial performance. They also believe that the market environment is likely to remain challenging for some time, making it difficult for UBS to achieve its long-term goals.
Stock Price
On Tuesday, UBS GROUP stock opened at $27.8 and closed at $27.7, a decrease of 2.5% from its previous closing price of 28.4. This significant dip in stock price follows Bank of America’s decision to downgrade UBS from “Buy” to “Neutral” due to the recent integration costs incurred in UBS’s acquisition of Credit Suisse. These integration costs are seen as factors that could weigh on UBS’s profits in the near future, and may have caused investors to be more wary of the stock. Despite this downgrade, analysts remain optimistic about UBS’s long-term prospects. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Ubs Group. More…
| Total Revenues | Net Income | Net Margin |
| – | 30.89k | – |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Ubs Group. More…
| Operations | Investing | Financing |
| 47.78k | 99.01k | -52.72k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Ubs Group. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.64M | 1.56M | – |
Key Ratios Snapshot
Some of the financial key ratios for Ubs Group are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 4.7% | – | – |
| FCF Margin | ROE | ROA |
| – | – | – |
Analysis
GoodWhale has conducted an analysis into UBS GROUP‘s wellbeing, and based on our Star Chart we have classified them as a ‘gorilla’. This classification suggests that the company has achieved stable and high revenue or earning growth due to its strong competitive advantage. Given such high performance, investors that seek to benefit from an established company with a strong competitive advantage may be interested in UBS GROUP. Our analysis further shows that the company is particularly strong in growth, asset, dividend, and medium in profitability. Moreover, UBS GROUP has a high health score of 10/10 with regard to its cashflows and debt, giving it the ability to sustain future operations in times of crisis. More…
Peers
UBS Group AG, Credit Suisse Group AG, HSBC Holdings PLC, and Nomura Holdings Inc are all leading global financial services firms. They offer a wide range of products and services, including investment banking, asset management, and retail banking. These companies are all highly competitive, and they are constantly striving to gain market share and improve their profitability.
– Credit Suisse Group AG ($NYSE:CS)
Credit Suisse Group AG is a financial services holding company. It operates through its subsidiaries, which provide banking, asset management, and other financial services to clients worldwide. As of 2022, Credit Suisse Group AG had a market cap of 12.51B. The company has its headquarters in Zurich, Switzerland, and employs approximately 45,000 people in over 50 countries.
– HSBC Holdings PLC ($LSE:HSBA)
HSBC Holdings PLC is a British multinational banking and financial services holding company. It is the 7th largest bank in the world by total assets and the largest in Europe with total assets of US$2.558 trillion. The company operates through four business segments: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Corporate and Other. The company offers a range of banking and financial services, including retail banking, credit cards, corporate and investment banking, wealth management, and insurance.
HSBC Holdings PLC has a market cap of 88.39B as of 2022. The company offers a range of banking and financial services, including retail banking, credit cards, corporate and investment banking, wealth management, and insurance.
– Nomura Holdings Inc ($TSE:8604)
Nomura Holdings Inc is a Japanese multinational financial services holding company headquartered in Tokyo, Japan. As of 2022, its market cap is 1.44T. The company provides services such as investment banking, asset management, and retail brokerage.
Summary
UBS Group is currently under review by Bank of America (BofA) with a downgrade from Buy to Neutral based on the weight of integration costs associated with Credit Suisse. Investment analysis around UBS Group highlights the need to account for the impact of the integration costs on their overall performance. This is especially important as UBS Group is a global financial services company that provides wealth management, asset management, investment banking, and other services. Investors and analysts need to take into account the cost of integrating Credit Suisse and assess any potential risks that may arise.
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