High expectations are priced into the UBS share price
Published: Wednesday, Jan 31st 2024, 14:50
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UBS shares have been on the rise for some time now. At their most recent high of CHF 26.55 at the end of December 2023, they were at their highest level in 15 years. They have thus risen by more than half since the takeover of Credit Suisse.
In December, market capitalization exceeded the CHF 90 billion mark for the first time in many years. In US dollars - the decisive currency for many investors - it was even more than 100 billion. However, before the financial crisis, when prices peaked at over CHF 70 per share, market capitalization was even higher at over CHF 150 billion.
Although the shares are currently trading at CHF 26.17, slightly below their December high, they have almost made up for the small dip to CHF 24.78 on the first trading day of 2024.
"Accolade for the share"
According to traders, the increasingly positive assessment of the outlook by investors worldwide over the course of the year was primarily responsible for the soaring share price. Among other things, the fact that activist investors such as Cevian have joined UBS may also have helped.
The well-known Cevian co-founder Lars Förberg even publicly announced that UBS shares would be worth CHF 50 if the valuation gap between UBS and the US bank Morgan Stanley (at twice the price of the material book value) were closed.
However, with a stake of just 1.3 percent, the Swedish investment company, which used to be a major shareholder in ABB, cannot exert much direct influence. Market observers therefore spoke more of "psychological help for the shares - in the sense of an accolade".
It is clear that at the current share price level, hopes of a successful integration and the associated growth expectations are already heavily priced in. It remains to be seen what the future holds for UBS shares.
Eleven analysts surveyed by the news agency AWP currently recommend buying the share, nine recommend holding it and three recommend selling it. The average target price is CHF 25.82, with Goldman Sachs among the optimists with a target price of CHF 34.10 and Barclays among the pessimists with CHF 18.
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