UBS
UBS Group AG - Registered Shares
Finance/Real Estate, Event Driven/Special Sit
04/03/2023
Presented
| Date | 03/27/2023 |
| Price | $19.40 |
| Market Cap | $60.29B |
| Ent Value | $99.44B |
| P/E Ratio | 8.3x |
| Book Value | $18.30 |
| Div Yield | 1.29% |
| Shares O/S | 3,107.73M |
| Ave Daily Vol | 4,120,700 |
| Short Int | 0.59% |
Current
| Price | $31.94 |
| Market Cap | $102.28B |
| UBS Group AG is a holding company, which engages in the provision of financial management solutions. It operates through the following segments: Global Wealth Management, Personal and Corporate Banking, Asset Management, Investment Bank, and Group Functions. The Global Wealth Management segment advises and offers financial services to wealthy private clients except those served by Wealth Management Americas which include banking and lending, wealth planning, and investment management. The Personal and Corporate segment offers financial products and services to private, corporate, and institutional clients in Switzerland. The Asset Management segment consists of investment management products and services; platform solutions and advisory support to institutions; wholesale intermediaries, and wealth management clients. The Investment Bank segment comprises investment advice, financial solutions, and capital markets access among corporate, institutional, and wealth management clients. The Group Functions segment is involved in the group services which consist of Technology, Corporate Services, Human Resources, Finance, Legal, Risk Control, Compliance, Regulatory and Governance, Communications and Branding, and Group Sustainability and Impact. The company was founded on June 29, 1998 and is headquartered in Zurich, Switzerland. |
Publicly traded companies mentioned herein: Credit Suisse Group AG (CSGN SW), UBS Group AG (UBS)
Highlights
The presenter is long shares of UBS Group AG (UBS), viewing it as a consolidation winner because of the Credit Suisse debacle. UBS is acquiring its most significant global competitor at a negative valuation, and he describes the net result as UBS receiving the Credit Suisse business along with $50B of equity capital essentially for free. While the integration will be complex and the market environment is negative, there seems to be a substantial margin for error, and he expects this deal to look extremely accretive for UBS down the road with hindsight. There are several aspects of the deal he considers attractive, including the antitrust waiving, the opportunity to significantly mark down the Credit Suisse balance sheet and take provisions for losses & restructuring, and the pro forma company’s ability to resume share buybacks potentially as soon as 2024. While analyzing the pro forma earnings profile requires many assumptions at this point, he thinks the deal looks 20%+ accretive on an underlying basis by 2025. Assuming some capital return, he estimates that investors are creating the pro forma business at 5x underlying earnings and 0.67x TB.
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