UBS Stock Plummets in 2023 After Disappointing Q4 Earnings – Price Drops 5%
UBS shares experienced a sharp decline following weak fourth-quarter earnings, leading analysts to revise their forecasts downward for 2023. Discover the key factors impacting UBS stock and expert insights on future performance.
UBS Group AG (UBS) shares tumbled nearly 5% on Tuesday after releasing disappointing fourth-quarter earnings that fell short of market expectations. The bank reported an adjusted pre-tax profit of $1.21 billion, excluding $146 million in restructuring costs, $110 million goodwill impairment, and a $29 million loss on properties held for sale. Net profit stood at $722 million, with diluted earnings per share of $0.19.
Societe Generale analyst Andrew Lim lowered UBS’s price target to 9.60 Swiss francs (CHF), suggesting a potential 25% downside from the previous close. Lim highlighted that the 13% rise in adjusted operating profit stemmed primarily from cost-cutting efforts rather than revenue growth. He also pointed to underwhelming global wealth management results, including a 6% revenue shortfall, an additional $5 billion in net outflows, and cautious guidance for 2020 to 2022 as key reasons for the downgrade.
Despite the earnings miss, UBS increased its dividend by 9.2% to $0.73 per share and announced plans to repurchase approximately $450 million in shares as part of its ongoing CHF 2 billion buyback program. Further repurchases will be evaluated in the second half of the year based on market conditions and business developments.
From a technical perspective, UBS stock broke below its trendline support during Tuesday’s trading, testing the 50-day moving average near $12.51. The Relative Strength Index (RSI) dropped to a neutral 44.27, while the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover, signaling potential further declines.
Investors should monitor whether UBS breaks below the 50-day moving average toward the 200-day moving average and recent lows around $11.80 in the coming sessions. Although a rebound above trendline resistance could push the stock back toward prior highs near $13.22, the prevailing bearish sentiment following earnings makes this less probable.
Note: The author holds no direct position in UBS stock beyond passive index fund exposure.
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