Almost double today: Could the value of UBS shares rise to 40 francs?

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A UBS share is worth around 22.50 francs this Wednesday; This is far from a price of 40 francs. According to the Royal Bank of Canada (RBC), the idea of ​​a 40-franc exchange rate is not that far-fetched.

On Monday, RBC raised UBS’s price target for the next twelve months to 30 francs. At this point, there will be an increase of almost 40 percent.

“The fog is clearing,” writes RBC analyst Anke Reingen. The RBC team examined 33 acquisitions to analyze UBS. Particular attention was paid to disclosure, regulatory review, price paid and strategic fit. “We think the CS process performs relatively well against these criteria,” Reingen writes.

Opinions are divided

Other banks also expect a lot from the new UBS: JP Morgan has a price target of 31 francs, Goldman Sachs has a price target of 35 francs. So is this realistic?

“I think this is exaggerated. After all, the share price has increased by almost a third this year,” says Matthias Geissbühler (48), investment manager at Raiffeisen Switzerland. The price development indicates that the takeover of CS is a good deal for UBS. Geissbühler now expects a respite in the stock market .

Geissbühler expects the maximum exchange rate to be between 25 and 27 francs in the next 12 to 18 months. But for this to happen, the integration of CS must proceed smoothly. “Following the strong price development, we advise shareholders to keep part of the profits and not increase them significantly,” continued Geissbühler. Otherwise, you should first wait and see how the progress begins. Now UBS needs to prove itself first: Everything now depends on how the integration will proceed and whether UBS can achieve its goals.

The management team is convinced

Bank Vontobel set the price target on UBS at 26.50 francs. It is also optimistic (though not as much as RBC or Goldman Sachs). “The results of UBS since the acquisition are very impressive,” explains analyst Jean-Philippe Bertschy, head of Swiss equity research at Vontobel. He is confident that the big bank can offset possible outflows in CS with inflows in UBS.

Bad news stays away. If it continues like this, the price will continue to increase. Bertschy also mentions UBS’s strong management team: “Colm Kelleher and Sergio Ermotti have a strong track record and have earned the trust of investors.”

Other banks such as ZKB also recommend purchasing UBS shares. ZKB expects a fair value of 26 francs per share.

Source :Blick