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4 Reasons to Add UBS Group AG (UBS) Stock to Your Portfolio
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UBS Group AG’s (UBS - Free Report) financials are expected to get continuous support from a strong capital position, digitalization efforts and the acquisition of Credit Suisse. Hence, it seems to be a wise idea to add UBS stock to your portfolio now, given its solid fundamentals and decent growth prospects.
The Zacks Consensus Estimate for UBS' earnings has been revised 2.4% and 3% north for 2023 and 2024, respectively, over the past week. This shows that analysts are optimistic regarding the company’s earnings prospects. It currently sports a Zacks Rank #1 (Strong Buy).
So far this year, shares of the company have rallied 41.4% on the NYSE, outperforming the industry's growth of 9.1%.
Image Source: Zacks Investment Research
Mentioned below are a few factors that make UBS a must-buy stock now.
Strategic Expansion Initiatives: In June 2023, UBS Group AG completed the acquisition of Credit Suisse, enhancing capabilities in wealth and asset management. It aims to substantially complete the integration process by 2026 end and achieve gross cost reductions of more than $10 billion. Also, a solid balance sheet position gives it an opportunity to undertake beneficial strategic acquisitions that will aid long-term growth.
Strong Capital Position:UBS displays a strong capital position. Post Credit Suisse acquisition, the company expects to continue to be capitalized well above its common equity tier (CET) 1 capital ratio target and regulatory minimum capital requirements. In fact, it aims to achieve CET1 capital ratio of around 15% by the end of 2026.
Digitalization Efforts: UBS Group AG is making efforts to become more digital and data-driven to provide clients with digital-first services with the establishment of Agile@UBS, quarterly business reviews and digital roadmaps, modern technology, automation and engineering excellence.
It is migrating toward a cloud-based application system and has also introduced an Artificial Intelligence, Data and Analytics center of expertise. These initiatives will help in delivering a client experience that is personalized, relevant, on-time and seamless, thereby providing the company a competitive edge.
Superior Return on Equity (ROE): UBS has an ROE of 16.18%, which is higher than the industry’s ROE of 12.45%. This reflects that the company reinvests its cash more efficiently than its peers.
Other Key Picks
A couple of other top-ranked stocks from the same industry are BBVA USA Bancshares, Inc. (BBVA - Free Report) and HSBC Holdings’ (HSBC - Free Report) . BBVA’s current-year earnings estimate has been revised 4.4% upward over the past 30 days. BBVA’s shares have gained 9.9% over the past three months. The stock currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for HSBC’s current-year earnings has been revised 3.7% upward over the past 30 days. Over the past three months, HSBC’s share price has decreased 3%. The stock currently sports a Zacks Rank #1.
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4 Reasons to Add UBS Group AG (UBS) Stock to Your Portfolio
UBS Group AG’s (UBS - Free Report) financials are expected to get continuous support from a strong capital position, digitalization efforts and the acquisition of Credit Suisse. Hence, it seems to be a wise idea to add UBS stock to your portfolio now, given its solid fundamentals and decent growth prospects.
The Zacks Consensus Estimate for UBS' earnings has been revised 2.4% and 3% north for 2023 and 2024, respectively, over the past week. This shows that analysts are optimistic regarding the company’s earnings prospects. It currently sports a Zacks Rank #1 (Strong Buy).
So far this year, shares of the company have rallied 41.4% on the NYSE, outperforming the industry's growth of 9.1%.
Image Source: Zacks Investment Research
Mentioned below are a few factors that make UBS a must-buy stock now.
Strategic Expansion Initiatives: In June 2023, UBS Group AG completed the acquisition of Credit Suisse, enhancing capabilities in wealth and asset management. It aims to substantially complete the integration process by 2026 end and achieve gross cost reductions of more than $10 billion. Also, a solid balance sheet position gives it an opportunity to undertake beneficial strategic acquisitions that will aid long-term growth.
Strong Capital Position:UBS displays a strong capital position. Post Credit Suisse acquisition, the company expects to continue to be capitalized well above its common equity tier (CET) 1 capital ratio target and regulatory minimum capital requirements. In fact, it aims to achieve CET1 capital ratio of around 15% by the end of 2026.
Digitalization Efforts: UBS Group AG is making efforts to become more digital and data-driven to provide clients with digital-first services with the establishment of Agile@UBS, quarterly business reviews and digital roadmaps, modern technology, automation and engineering excellence.
It is migrating toward a cloud-based application system and has also introduced an Artificial Intelligence, Data and Analytics center of expertise. These initiatives will help in delivering a client experience that is personalized, relevant, on-time and seamless, thereby providing the company a competitive edge.
Superior Return on Equity (ROE): UBS has an ROE of 16.18%, which is higher than the industry’s ROE of 12.45%. This reflects that the company reinvests its cash more efficiently than its peers.
Other Key Picks
A couple of other top-ranked stocks from the same industry are BBVA USA Bancshares, Inc. (BBVA - Free Report) and HSBC Holdings’ (HSBC - Free Report) . BBVA’s current-year earnings estimate has been revised 4.4% upward over the past 30 days. BBVA’s shares have gained 9.9% over the past three months. The stock currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for HSBC’s current-year earnings has been revised 3.7% upward over the past 30 days. Over the past three months, HSBC’s share price has decreased 3%. The stock currently sports a Zacks Rank #1.