UBS shares at new annual high after quarterly figures
Published: Wednesday, Oct 30th 2024, 11:00
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UBS shares are trading significantly higher in early trading on Wednesday. The third-quarter figures presented in the morning and the further progress in the CS integration are being well received by analysts.
Shortly after 9.30 a.m., UBS shares gained 2.1 percent to 29.06 francs in a weaker overall market, and had even risen to 29.57 francs at the high for the day so far. The shares of the major Swiss bank have thus reached a new annual and multi-year high. The old annual high from the beginning of June was 28.78 francs. The last time UBS shares traded well above their current value, or over 30 francs, was in spring 2008 - shortly after the outbreak of the major financial crisis in 2008/09.
For the third time in a row, the now only major Swiss bank has significantly exceeded analysts' profit forecasts with its results for the period from July to September. Vontobel expert Andreas Venditti is full of praise. He cites the fact that earnings were higher than expected in all business areas as the main reason for the positive earnings surprise.
He also emphasizes the positive outlook and the confirmed commitment of UBS management to the dividend and share buyback plans for 2025 and 2026. And last but not least, the bank is (so far) ahead of schedule in the integration of CS in the areas it can control.
This last point is also addressed by ZKB analyst Michael Klien. UBS appears to be one step ahead with its cost-cutting plans, he writes in his commentary. UBS is now assuming cumulative gross cost reductions of USD 7.5 billion by the end of 2024, after previously only talking about USD 7 billion. The CET1 capital ratio was worse than expected. However, the bank has voluntarily accelerated the amortization of the remaining purchase price allocation (PPA) in connection with the CS takeover, the analyst says.
Foreign banking experts also see the result as positive. Net profit was almost twice as high as consensus expectations, according to Goldman Sachs, for example. In addition to the good figures, the US broker Jefferies also mentions the faster-than-planned wind-up of businesses that are no longer part of UBS's core business. JP Morgan emphasizes that the transformation is well underway. Most analysts continue to recommend UBS shares as a buy.
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