UBS: Deutsche Bank raises its buy recommendation

(CercleFinance.com) - Deutsche Bank announced on Tuesday that it had upgraded its recommendation on UBS shares from 'hold' to 'buy', with a price target raised from CHF 29 to CHF 37.


In a research note published in the morning, the analyst points out that the Swiss bank's shares fell by 7% in the session following the publication of its fourth-quarter results, and have continued to underperform the European sector ever since.

Yet, he points out, UBS has announced its intention to significantly reduce its use of "double leverage", a practice which consists of financing Credit Suisse's equity capital with debt.

The intermediary also welcomes the Swiss bank's determination to continue cutting costs while maintaining its significant redistributions to shareholders.

At current levels, the UBS share is trading at 10.3x its expected earnings to 2026, it adds, a multiple in line with its historical ten-year average but 40% below that of its peers, it concludes.

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