David Driscoll UBS Group AG UBS-N PARTIAL BUY Jul 02, 2024

UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. Social media mentions are up 8% in the past 24h.

UBS is the 9th largest bank in the world, based on capitalization.  We like that quarterly cash reserves are growing, while debt is retired.  It trades a 28x earnings and supports a robust 40% ROE. Its modest dividend is backed by a payout ratio under 10% of cash flow.  We recommend setting a stop-loss at $24.50, looking to achieve $34 — upside potential of 17%.  Yield 1.2% 

We reiterate UBS as a TOP PICK.  The Swiss based bank is under pressure as analysts believe it may be required to hold larger capital reserves.  Management argues it can withstand a $200 billion loss.  The government will not publish its recommendation until next year.  Meanwhile, cash reserves are strong, as debt is aggressively retired.  It trades at book value and supports a 38% ROE.  We continue to recommend a stop at $24.50, looking to achieve $32.50 -- upside potential of 19%.  Yield 1.2%

Our PAST TOP PICK with UBS is progressing well.  To remain disciplined, we recommend trailing up the stop (from $24.50) to $27.00 at this time.  

Our PAST TOP PICK with UBS has achieved its target at $32.  To remain disciplined, we recommend covering half the position at this time and maintaining the stop at $27.

Our PAST TOP PICK with UBS is progressing well.  To remain disciplined, we recommend trailing up the stop (from $27) to $31 at this time.  

Our PAST TOP PICK with UBS has triggered its stop at $31.  To remain disciplined, we recommend covering the position at this time.  When combined with our previous guidance, this will result in a net investment gain of 11%