A month has gone by since the last earnings report for UBS (UBS). Shares have added about 8.8% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is UBS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
UBS Group Q2 Earnings & Revenues Rise Y/Y, Expenses Decline
UBS Group reported a second-quarter 2025 net profit attributable to shareholders of $2.39 billion compared with $1.14 billion in the prior-year quarter.
Results were driven by the strong performances of the Global Wealth Management, Asset Management, and Investment Bank divisions. However, the increase in credit loss expenses was a headwind.
Revenues & Expenses
The company’s second-quarter total revenues increased 1.7% year over year to $12.11 billion.
Operating expenses fell 5.6% year over year to $9.75 billion.
UBS Group reported total credit loss expenses of $163 million, which surged 71.6% from the year-ago quarter.
Business Divisions’ Performance
Global Wealth Management’s operating profit before tax was $1.2 billion, up from $871 million in the year-ago quarter.
Asset Management’s operating profit before tax was $153 million, up 17.7% from the year-ago quarter.
Personal & Corporate Banking reported operating profit before tax of $695 million, down 10.1% year over year.
The Investment Bank unit reported an operating profit before tax of $557 million, up 16.7% from the year-ago quarter.
Non-Core & Legacy incurred an operating loss before tax of $250 million in the reported quarter compared with a loss of $4.05 million in the year-ago quarter.
Group Items reported an operating loss before tax of $167 million compared with a loss of $377 million in the year-ago quarter.
Capital Position
Total assets rose 8.2% from the previous quarter’s end to $1.67 trillion.
UBS’ return on Common Equity Tier 1 (CET1) capital was 13.5% as of June 30, 2025, compared with 5.9% as of June 30, 2024.
The risk-weighted assets declined 1.3% year over year to $504.5 billion.
The CET1 capital declined 4.4% year over year to $72.7 billion. As of June 30, 2025, UBS's invested assets were $6.6 trillion, up 12.6% year over year.
Outlook
Management expects the Underlying RoCET1 2026 exit rate to be 15%.
The underlying cost-to-income ratio 2026 exit rate is expected to be less than 70%.
Management expects gross cost savings of around $13 billion by the end of 2026 compared with the 2022 combined cost base of UBS Group and Credit Suisse.
CET 1 capital ratio is expected to be around 14% and CET1 leverage ratio of greater than 4.0% by 2026.
Division Targets
The company expects the Global Wealth Management business to surpass $5 trillion of invested assets by 2028, with around $100 billion of net new assets in 2025.
Personal & Corporate Banking business is anticipated to witness an underlying cost / income ratio of less than 50% by the end of 2026.
Asset Management business is expected to register an underlying cost / income ratio of less than 70% by the end of 2026.
The Investment Bank is expected to register an underlying return on attributed equity of around 15% through the cycle, while Non-core and Legacy business is projected to register an underlying loss before tax of less than $1 billion, underlying operating expenses of around $1.8 billion excluding litigation, and risk-weighted assets of approximately $2 billion by the end of 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -19.51% due to these changes.
VGM Scores
Currently, UBS has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, UBS has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
UBS belongs to the Zacks Banks - Foreign industry. Another stock from the same industry, Barclays (BCS), has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Barclays reported revenues of $9.6 billion in the last reported quarter, representing a year-over-year change of +20.3%. EPS of $0.62 for the same period compares with $0.42 a year ago.
Barclays is expected to post earnings of $0.52 per share for the current quarter, representing a year-over-year change of -7.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.7%.
Barclays has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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UBS Group AG (UBS): Free Stock Analysis Report Barclays PLC (BCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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