On May 11, Zacks Investment Research upgraded UBS AG (UBS) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
UBS AG has been witnessing rising earnings estimates on the back of strong first-quarter 2013 results. Moreover, this well known foreign bank delivered a year-to-date return of 10.6%. The long-term expected earnings growth rate for this stock is 20.0%.
UBS AG reported first-quarter results on Apr 30. Net income attributable to shareholders came in at CHF 988 million ($1,062.3 million), which outpaced the prior-quarter’s loss of CHF 1.9 billion ($2.0 billion). The positive quarterly results were primarily attributable to lower net charges for provisions for litigation and regulatory matters, as well as reduced own credit loss.
The company experienced higher net interest and trading revenues, along with increased net fee and commission income. Further, decreased operating expenses acted as a tailwind for the quarter.
UBS AG marked growth in invested assets, and the company’s balance sheet indicated a strong capital position. The BIS Basel III framework came into effect in Switzerland on Jan 1, 2013. The company’s phase-in BIS Basel III common equity tier 1 ratio stood at 15.3% as of Mar 31, 2013, stable compared with the prior quarter.
Further, phase-in BIS Basel III common equity tier 1 capital increased slightly by CHF 0.2 billion to CHF 40.2 billion ($42.3 billion) as of Mar 31, 2013. Phase-in Basel III risk-weighted assets surged from CHF 0.7 billion to CHF 262.5 billion ($276 billion).
The Zacks Consensus Estimate for 2013 increased 2.0% to $1.50 per share over the last 30 days. For 2014, the Zacks Consensus Estimate jumped 2.2% to $1.83 per share over the same time frame.
Other Stocks to Consider
Well performing banks that are worth considering include National Bank of Canada (NTIOF), The Toronto-Dominion Bank (TD) and Deutsche Bank AG (DB), all of which carry a Zacks Rank #2 (Buy).
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