UBS Group stock forecast: Will wooing Gen Zs pay off?
Swiss bank UBS Group (UBS) is well known as a wealth manager for the super-rich – it even posts an annual Billionaire’s Report, featuring insights from the world’s wealthiest investors.
But with the firm’s acquisition of automated wealth management provider Wealthfront, it is looking to leverage technology to attract a younger and not-so-super-rich clientele.
The fourth quarter saw the Swiss bank set ambitious new targets for growth, but can it keep up the momentum and what will shape the UBS stock price forecast in 2022?
UBS historical share price
Between February 2018 and February 2020, the UBS share price saw its value decline by over 35%, triggered by a period of weaker profits. Coming into 2020, UBS stock was trading at around $13, only for its value to tumble to around $8 as investors feared significant financial market disruption when the coronavirus pandemic hit.
Yet the financial markets proved resilient. A European Banking Outlook paper from consulting firm Oliver Wyman found that over the course of the pandemic, “capital levels built up after the financial crisis have proven sufficient, while unprecedented levels of government support for corporates have blunted or deferred many of the pandemic’s economic impacts”.
This saw the UBS share value rise over the second half of 2020, and it had recovered its pre-pandemic value by November 2020. The following year saw a period of sustained price growth for UBS shares, albeit with fluctuations, with prices rising from $14 to $18 during 2021.
More recently, UBS stock news has been dominated by quarterly results. On 26 October 2021, a strong Q3 results release saw UBS reporting pre-tax profits of $2.9bn for the quarter, an increase of 11% year on year. The share price jumped more than 4% over the following week as investors reacted to the positive news. Markets also reacted favourably to UBS’s Q4 announcement on 1 February, with the share price rising by 9.27% on the day of its results release.
In terms of technical UBS stock analysis, the relative strength index (RSI) for UBS shares repeatedly pushed to 70 over the course of 2021, a signal that the stock was overvalued or overbought. However, the RSI for UBS is currently neutral at 46, suggesting that the stock is no longer due a price correction.
Q4 results update
The bank released its fourth-quarter results on 1 February 2022, reporting 2021 net profits of $7.5bn – up 14% year on year.
Yet it wasn't all good news – net profit attributable to shareholders was down on the prior year quarter ($1.3bn vs $1.6bn), as UBS’s bottom line was hit by an increase in litigation provisions for a French tax case.
Its personal and corporate banking business saw operating income increase 11% year on year, and UBS set itself an ambitious target of a cost-to-income ratio of 70-73%. The firm also set a new target for return on CET1 capital of 15-18%, against a Q4 2021 return of 11.9%.
CET1 capital is a component of Tier 1 Capital, which banks are required to maintain to absorb unexpected losses that arise during the course of operations.
“Our new aspirations, targets and goals will position us to live up to our purpose, better serve clients, deploy technology in differentiated and impactful ways, and open our ecosystem for new and existing clients,” said Ralph Hamers, UBS’s group CEO.
Wealthfront acquisition
January 2022 saw UBS announce the acquisition of Wealthfront, a US automated wealth management provider, valued at $1.4bn. The Swiss banking giant is hoping this will help it to target younger, more tech-savvy investors in the US.
“With more than 130 million investors in the US alone, millennials and the Gen Z population together comprise a high growth segment that will own an increasing share of the world’s wealth,” said the firm in its press release.
UBS is no doubt looking to solidify the move to digital that occurred over the course of the pandemic, and benefit from efficiency savings and growing market share as a result.
“Covid-19 prompted banks to run an experiment: ‘Let’s close all our branches and offices for six months and see what happens,’” explained analysts in the Oliver Wyman report.
“In large part, this has been successful, with remote management systems driving both increased efficiency and customer satisfaction. Banks will look to lock in new customer behaviours, where they can capture ongoing efficiency savings,” analysts concluded.
The not-so-super-rich
The Wealthfront acquisition complements UBS’s longer-held aim to develop a digital-led service for its two million so-called Workplace Wealth clients.
UBS prides itself on being “the leading wealth manager in the world”, and is well known for managing high-net-worth individuals. But this new digital service opens up a significant market: the not-so-super-rich. In its third-quarter earnings release, UBS announced that it hopes its new office can target two million US consumers who have stock and retirement plans.
Moreover, the fourth-quarter results release saw UBS issue ambitious new targets for wealth management, with the firm aiming for $6trn invested across global wealth management, asset management and personal and corporate banking.
Yet this new venture puts UBS in competition with a number of rivals – notably Morgan Stanley (MS), who redoubled efforts to bolster its digital wealth management offering by acquiring E*TRADE in 2020.
French fine
On 13 December 2021, the French Court of Appeal upheld an earlier conviction for unlawful solicitation and aggravated laundering of the proceeds of tax fraud, but did slash an earlier penalty for allegedly helping wealthy clients to evade tax.
UBS remains liable for a fine of €3.75m ($4.22m), in addition to a court-ordered €1bn confiscation, and €800m of civil damages – and these penalties are already impacting the bank’s bottom line.
UBS’s Q4 results saw operating expenses increase by 8%, which it attributed in part to an increase of $740m it had set aside for litigation provisions for the case.
The money laundering conviction also has the potential to cause significant reputational damage, and on 20 December 2021, UBS announced that it had filed an appeal with the French Supreme Court, enabling the firm to “thoroughly assess the verdict of the Court of Appeal and to determine next steps in the best interest of its stakeholders”.
UBS Group stock forecast for 2022
According to data collected by MarketBeat, the analyst average 12-month UBS stock price target was $19.17 – a 3% upside on the share price at the time of writing (1 February). This was based on 14 analyst views, ranging from a high of $22 to a low of $15.09.
Analysts currently rate UBS stock as a consensus ‘buy’, with 10 ‘buy’, four ‘hold’ and zero ‘sell’ ratings.
July 2021 saw Jefferies Financial Group initiate coverage on UBS, setting a price target of $15.09 and a ‘buy’ rating. Goldman Sachs also set a price target of $15.80 for UBS stock, and issued a ‘hold’ rating.
Strong third-quarter results released on 26 October 2021 prompted a flurry of analyst activity, with Credit Suisse and Royal Bank of Canada reiterating ‘outperform’ ratings, while Markus Mischker at DZ Bank downgraded the stock to a ‘hold’.
January 2022 saw price target boosts from Deutsche Bank, Berenberg Bank and JP Morgan. Barclays, Exane BNP Paribas, and Keefe, Bruyette and Woods also upgraded their ratings in anticipation of the fourth-quarter results.
It’s worth noting that analyst predictions are frequently wrong, and forecasts are no substitute for your own research. Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
UBS stock forecast 2025
UBS stock market predictions from the algorithm-based forecasting service WalletInvestor showed the price increasing over the next 12 months, and hitting $22.12 by January 2023.
At the time of writing (1 February), the site predicted the share price increasing to $26.27 in January 2024, $30.53 in January 2025, $34.73 in January 2026 and $38.85 by January 2027.
Note that algorithm-based predictions can also be inaccurate because they are based on past performance, which is no guarantee of future results.
Forecasts shouldn’t be used as a substitute for your own research. Once again, always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
FAQs
Is UBS stock a good buy?
According to data from MarketBeat, UBS stock was rated a consensus ‘buy’, based on 14 analyst views. UBS stock currently has 10 ‘buy’ ratings, four ‘hold’ ratings, and zero ‘sell’ recommendations.
It’s worth noting that analyst predictions are frequently wrong, and forecasts are no substitute for your own research. Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
Why has the UBS stock price been going up?
The UBS stock price increased over the past 12 months, thanks in part to positive quarterly results releases. Note that past performance is no guarantee of future results.
Will UBS stock go up or down?
According to data collected by MarketBeat, the analyst average 12-month UBS stock price target was $19.17 – a 3% upside on the share price at the time of writing (1 February). This was based on 14 analyst views, ranging from a high of $22 to a low of $15.09.
It’s worth noting that analyst predictions are frequently wrong, and forecasts are no substitute for your own research. Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
Where is UBS stock listed?
UBS shares are listed on the New York Stock Exchange (NYSE) and the Swiss Stock Exchange (SIX).
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