Rafael_Wiedenmeier/iStock Unpublished via Getty Images
Citi Research downgraded UBS Group (NYSE:UBS) the stock moved from Neutral to Buy on Tuesday as its “valuation appears full” after a strong rally over the past year.
UBS is up 38% from a year ago, but is down 8.3% this year.
Analyst Andrew Coombs struggles “to see what drives further near-term revaluation and the current multiple [1.2x price/tangle book] now offers very little margin for execution risk in the Credit Suisse integration,” he wrote in a note to clients.
He also highlighted the uncertainty after the Swiss government unveiled proposals earlier this month that, if approved, would force UBS (UBS) and other systemically important banks to face tougher capital requirements.
Last week, Bloomberg reported that UBS (UBS) had plans for the next round of layoffs as the Swiss bank continues to reduce headcount after bailing out former rival Credit Suisse last year.
Despite losing its bullish rating on Citi, UBS gained 1.3% in mid-afternoon trading Tuesday.
Coombs’ Neutral rating is in line with the SA Quant system rating and the average rating of Wall Street analysts, both of which are Hold.