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ZKB Analyst Predicts More UBS Buybacks and Higher Dividends

  • By The Swiss Times
  • 2 April 2024

ZKB analysts predict a bullish future for UBS, with dividends set to nearly double and share buybacks to escalate.

ZKB Analyst Predicts More UBS Buybacks and Higher Dividends
Keystone/MICHAEL BUHOLZER

UBS shares witnessed a modest rise of 0.60%, reaching 27.91 francs, even as the Swiss Market Index saw a decline. This uptick forms part of a 12% surge in UBS shares since the year commenced.

The anticipation builds as UBS, a titan in the Swiss banking sector, unveiled plans for a new share buyback valued at up to $2 billion.

This initiative follows an earlier declaration to repurchase up to a billion dollars of shares this year, a strategy aligned with the post-legal fusion of UBS and Credit Suisse.

In a notable shift from the 2022 buyback program, where UBS reacquired shares worth 5.2 billion francs, the bank chose not to annul these shares due to the impending Credit Suisse acquisition.

Further insights from ZKB’s Michael Klien signal an optimistic outlook according to claims from this article, with dividend predictions for UBS shares soaring to an 11% increase above the consensus, aiming for 1.06 francs. Klien’s projections also encompass a significant leap in share buybacks, estimating $2.5 billion by 2026, escalating to $3 billion the subsequent year.

This bullish forecast is mirrored in ZKB’s medium-term valuation of UBS, pegging the fair value at an impressive 37 francs per share by the close of 2026.

This prediction rides on the back of the merger with Credit Suisse, heralding a phase of increased dividends and intensified buyback activities, marking UBS shares as a compelling investment with an overweight rating.

As UBS gears up for this financial metamorphosis, stakeholders watch keenly, anticipating the strategic moves that will redefine the bank’s trajectory and reinforce its stature in the global banking arena.

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