Shares of the banking giant UBS Group AG (UBS) dropped nearly 6% in pre-market trading, despite reporting strong Q4 profits. The bank’s $3 billion share buyback also failed to excite investors. Citi analysts noted that the overall cost projections and cost-to-income ratio for 2026 remain unchanged. They also indicated that the drag on net interest income (NII) is likely to persist into the first quarter of the upcoming period. UBS stock in Switzerland declined nearly 6% as of writing.
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UBS Surpasses Profit Expectations
In the fourth quarter, UBS reported a net profit attributable to shareholders of $770 million, surpassing the analyst forecast of $483 million. Meanwhile, revenues grew by 7% year-over-year to $11.6 billion. Among its segments, Investment Bank’s underlying revenues increased by 37% driven by growth in Global Markets and Global Banking.
The latest results mark UBS’s fourth straight profitable quarter as it integrates its former rival Credit Suisse, acquired in 2023 under a Swiss regulator-backed deal. UBS announced it is on schedule with its 2024 integration goals and achieved an additional $700 million in gross cost savings in Q4.
Additionally, the group revealed plans to buy back $1 billion in shares during the first half of 2025, with an additional $2 billion repurchase planned for the second half of this year.
Analysts React to UBS Q4 Results
Following the results, five-star-rated analyst Benjamin Goy at Deutsche Bank maintained his Hold rating on the stock. Goy praised the solid Q4 performance but pointed out that the distribution of earnings across divisions could have been improved. He predicts a downside of almost 9% in UBS share price.
On the other hand, Goldman Sachs reiterated its Buy rating on UBS stock, predicting a growth rate of 34%. Similarly, analysts from J.P. Morgan and RBC Capital also confirmed their Buy ratings after Q4 results.
Is UBS Stock a Buy?
Overall, UBS stock has received a Moderate Buy rating on TipRanks based on six Buy and three Hold recommendations. The average share price target for UBS stock is $37.18, which is 6.41% higher than the current price.
Year-to-date, UBS stock has gained over 15%.
