×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: ubs | credit suisse | banking stocks

UBS, Big US Banks Could Be Winners: Stock Analysts

UBS, Big US Banks Could Be Winners: Stock Analysts
(AP)

By    |   Monday, 20 March 2023 03:54 PM EDT

The merger of Credit Suisse (CS) with UBS (UBS) could boost the latter’s stock, along with those of big U.S. banks, analysts tell CNBC.

While Wall Street is digesting the union of the two globally significant financial banks, a number of analysts have gone on record saying they think it’s positive news for long-term investors.

Bank of America analyst Alastair Ryan upgraded UBS’ U.S.-listed shares to Buy from Neutral, citing possible cost synergies. Ryan also upped his price target to $24.82 from $22.65, implying a 36.3% lift in the stock.

“The industrial logic is impeccable: CS was the closest competitor to UBS in wealth management and Switzerland, and both banks are heavy in Swiss central costs,” Ryan wrote in a Monday client note.

Jefferies analyst Flora Bocahut said that while the deal looks good on paper, the onus is now on UBS to deliver. However, the forced merger of Credit Suisse and UBS is a better alternative to nationalization of the bank or its potential unwinding, Bocahut said.

“We think the objective of this transaction, while solving CS’ situation & associated risks for the system, is to reach a win/win, where UBS shareholders also get value out of this deal over time,” Bocahut wrote in a note to clients on Sunday.

However, Bocahut pointed to at least five downsides to the deal: “UBS embarks significant execution risk, litigation risk, the buyback is temporarily suspended (unclear how long), UBS’ capital requirement is likely to be revised up, and management focus will be captured by this deal for many quarters, maybe years.”

Goldman Sachs Chief Credit Strategist Lotfi Karoui was encouraged by the deal, writing in a Sunday note: “On Friday, we argued that the performance of the broader European banking sector would remain pressured until clarity is provided on Credit Suisse’s future path and recommended moving to a neutral allocation on banks in the EUR market (from overweight previously. Today’s outcome provides such clarity.”

As for banking stocks in the U.S., Bank of America analyst Ebrahim Poonawala said that if investors’ confidence in the containment of deposits at regional banks, can be restored, stock prices could stabilize.

Poonawala said investors will be watching the Federal Reserve’s policy meeting this week to see if it increases the fed funds rate by 25 basis points, as had been expected.

Wells Fargo analyst Mike Mayo said the Credit Suisse-UBS combination, which is not expected to close until the end of 2023, points to the strength of the biggest banks and gives the two giants time to finalize the deal.

Mayo called the deal proof that “Goliath is winning—that the largest U.S. capital players can continue to gain market share, as they’ve done for the past decade.”


 

© 2024 Newsmax Finance. All rights reserved.


StreetTalk
The merger of Credit Suisse (CS) with UBS (UBS) could boost the latter's stock, along with those of big U.S. banks, analysts tell CNBC.
ubs, credit suisse, banking stocks
453
2023-54-20
Monday, 20 March 2023 03:54 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved