Bull of the Day: UBS Group AG (UBS)

UBS Group AG, a Zacks Rank #1 (Strong Buy), has seen its shares surge this year as foreign banks continue to outperform the broader market. The stock broke out to an all-time high in 2025 on increasing volume. Shares continue to display relative strength as buying pressure accumulates in this market leader.

The company is part of the Zacks Banks – Foreign industry group, which currently ranks in the top 29% out of approximately 250 Zacks Ranked Industries. It’s relatively easy to see this group’s steady trend of outperformance:

Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued based on traditional valuation metrics. They are also projected to experience above-average earnings growth, which signifies a powerful combination that should lead to higher prices in the future.

Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.

Company Description

UBS Group AG provides financial advice and solutions to institutional, corporate, and private clients globally. The company offers a host of financial-related services such as personal banking, investment advice and solutions, lending, wealth planning, asset allocation, and investment banking. UBS was founded in 1862 and is headquartered in Zurich, Switzerland.

UBS remains focused on opportunistic expansion strategies in various areas by entering into partnerships with a host of other firms. These inorganic growth moves are expected to benefit the company’s long-term trajectory. UBS maintains a strong capital position and its efficiency initiatives will likely continue to aid profitability.

In addition, UBS is progressing well with its Credit Suisse integration plan. As a result, the company is well-positioned to enhance the client experience and unlock further cost reductions into 2026 as it delivers on its ambitious goal of $13 billion in gross cost savings by the end of next year.

Earnings Trends and Future Estimates

UBS Group AG UBS has established a healthy track record of beating earnings estimates. The company has surpassed the EPS mark in each of the past four quarters. The financial firm most recently reported third-quarter earnings back in October of 76 cents per share, beating the Zacks Consensus Estimate of $0.48/share by 58.3%.

One of the largest European banks by total assets, UBS delivered a trailing four-quarter average earnings surprise of 53.2%. Consistently beating earnings estimates is a recipe for success.

The Switzerland-based bank has witnessed improving earnings estimate revisions as of late. Looking into next year, analysts have raised their 2026 EPS estimates by 6.21% in the past 60 days. The Zacks Consensus Estimate now stands at $3.25 per share, reflecting nearly 30% growth relative to this year.

Let’s Get Technical

UBS shares have advanced more than 50% off the April bottom. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the market. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.

Notice how shares remain above an upward-sloping 200-day (red line) moving average. A recent pullback presents a unique buying opportunity. With both strong fundamentals and technicals, UBS is poised to continue its outperformance.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, UBS Group AG has recently witnessed positive revisions. As long as this trend remains intact (and UBS continues to deliver earnings beats), the stock will likely continue its bullish run through the remainder of this year and beyond.

Bottom Line

Solid institutional buying should continue to provide a tailwind for the stock price. UBS has vastly outperformed its financial peers, and increasing volume at recent breakout levels adds to the bullish sentiment.

Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. Backed by a leading industry group and robust history of earnings beats, it’s not difficult to see why this company is a compelling investment.

Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put UBS on your watchlist.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research