2024-01-24 21:42:12 ET
Summary
- UBS's Strategic Outlook: The conclusion highlights UBS's strategic maneuvers, emphasizing both promise and peril in the impending merger with Credit Suisse.
- Optimistic Elements: We identify ambitious cost-cutting initiatives and the potential for synergies as optimistic factors contributing to a positive outlook.
- Risks: Highlighted risks include uncertainties about Credit Suisse's domestic operations and challenges in downsizing with increased debt.
- Valuation Models: Two models suggest fair prices of $27 (-39.7%) and $53.40 (84).
- Success Determinants: Success depends on economic conditions, regulatory dynamics, and effective execution of UBS's strategic vision.
Thesis
In the aftermath of my previous article on UBS Group AG ( UBS ), the stock has surged by an impressive 37.67%. In this piece, I aim to elucidate why, despite lingering concerns about underperformance, UBS represents a compelling opportunity.
Furthermore, I have crafted two Residual Earning Models, with the most optimistic one pointing to a fair price of $53.40. Essentially, this suggests that UBS is catching with the market valuation of the American retail banking giant Wells Fargo and Company ( WFC ), by suggesting a fair $152.8 billion market cap....
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Momentum Has Shown That Despite The Risks, UBS Is A Worthy Investment (Rating Upgrade)