UBS Group AG (VTX:UBSG) Annual Results Just Came Out: Here's What Analysts Are Forecasting For This Year
The yearly results for UBS Group AG (VTX:UBSG) were released last week, making it a good time to revisit its performance. UBS Group reported US$35b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.25 beat expectations, being 2.4% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for UBS Group
Taking into account the latest results, UBS Group's 17 analysts currently expect revenues in 2023 to be US$35.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 9.0% to US$2.23 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$36.1b and earnings per share (EPS) of US$2.29 in 2023. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of CHF21.61, suggesting the downgrades are not expected to have a long-term impact on UBS Group's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic UBS Group analyst has a price target of CHF35.60 per share, while the most pessimistic values it at CHF13.20. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that UBS Group's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 1.4% growth on an annualised basis. This is compared to a historical growth rate of 4.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that UBS Group is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CHF21.61, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for UBS Group going out to 2025, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for UBS Group you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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