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UBS is a preeminent global financial advisory and solutions provider, catering to private, institutional, and corporate clients across the world, with a particular emphasis on Swiss private clients. With a widespread presence in major financial centers, our recent integration with Credit Suisse enhances our capabilities, offering clients elevated value, a broader spectrum of services, and an extended global reach, reaffirming UBS's role as a driver of financial achievement.<ref>https://www.ubs.com/global/en/our-firm/what-we-do.html</ref>
UBS is a preeminent global financial advisory and solutions provider, catering to private, institutional, and corporate clients across the world, with a particular emphasis on Swiss private clients. With a widespread presence in major financial centers, our recent integration with Credit Suisse enhances our capabilities, offering clients elevated value, a broader spectrum of services, and an extended global reach, reaffirming UBS's role as a driver of financial achievement.<ref>https://www.ubs.com/global/en/our-firm/what-we-do.html</ref>
Considering UBS Group AG's strategic trajectory and integrated assumptions, our analysis envisions a potential 53.5% return over five years, correlating to an average annual growth rate of about 10.7%. This projects a £100,000 investment in UBS potentially growing to around £153,500 within five years, considering the foreseen upside. These insights amalgamate Stockhub user perspectives, our detailed DCF model, and current market valuation.


== Operations ==
== Operations ==
Line 83: Line 81:


== Markets ==
== Markets ==
=== Total Addressable Market ===
Total Addressable Market: Here, the total addressable market (TAM) is defined as the global financial services market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $28.1 trillion.<ref>https://www.thebusinessresearchcompany.com/report/financial-services-global-market-report</ref>
=== Serviceable Available Market ===
Serviceable Available Market: Here, the serviceable available market (SAM) is defined as the global commercial banking market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $2.8 trillion.<ref>https://www.ibisworld.com/global/market-size/global-commercial-banks/</ref>
=== Serviceable Obtainable Market ===
Serviceable Obtainable Market: Here, the serviceable obtainable market (SOM) is defined as the US commercial banking market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $1.1 trillion.<ref>https://www.ibisworld.com/industry-statistics/market-size/commercial-banking-united-states/</ref>


== Competition ==
== Competition ==
Line 160: Line 149:


== Financials ==
== Financials ==
===Historical Figures===
====Latest Year====
In 2022, UBS Group AG reported total revenue of $33.27 billion, showing consistency with the previous year. This marginal decline from the $35.06 billion revenue in 2021 underscores the company's ability to maintain profitability. Net income available to common stockholders remained at $7.63 billion, reflecting stability.
====Past Four Years====
Over the past four years, UBS Group AG's financial trajectory displayed a pattern of growth. Starting at $28.97 billion in 2019, the revenue steadily rose to $33.08 billion in 2020 and further to $35.06 billion in 2021. Although there was a slight contraction to $33.27 billion in 2022, the net income available to common stockholders showed consistent growth from $4.30 billion in 2019 to $7.63 billion in 2022.
====Financial Performance Analysis====
UBS Group AG's financial performance exhibited stability over the years, with modest revenue fluctuations and steady net income growth. Despite the dynamic economic landscape, the company's revenue remained above $30 billion from 2019 to 2022. This consistent growth suggests effective management strategies. Further analysis of factors influencing these trends would provide a more comprehensive understanding.
[[File:Financials UBS.png|center|thumb|500x500px]]


== Valuation ==
== Valuation ==
===What's the Current Value of UBS Group AG?===
As of August 23rd, 2023, UBS Group AG shares have attained a value of $23.73, reflecting a steady path of recuperation subsequent to the effects of the Covid-19 pandemic. This optimistic momentum underscores UBS Group AG's tenacity and capacity for expansion.
{| class="wikitable"
! colspan="4" |Airbus Current Valuation - August 2023
|-
|Share Price (@09/08)
|[$]
|
|'''23.73'''
|-
|Shares Outstanding
|[#B]
|
|3.23
|-
|Equity Value
|[$B]
|
|76.65
|-
|Add:
Net Debt at Dec. 31, 2022
|[$B]
|
|17.1
|-
|'''Enterprise Value'''
|[$B]
|
|59.5
|}In our analysis of Airbus's valuation, we employed two distinct methods:
*'''Discounted Cashflow''': By employing the perpetuity growth approach, we ascertain that UBS Group AG's implied share price stands at '''$36.43'''. Consequently, this yields an approximated upside potential of '''53.5%'''.
*'''Trading Comps''': In light of our calculations based on the comps analysis, where the Price-to-Earnings (P/E) ratio indicates an estimated value of '''$15.93''', it's apparent that UBS Group AG's current stock value of $23.73 suggests a potential '''overvaluation''' in comparison to our projected valuation ranges.
===What's the expected return of an Investment in the Company?===
Selecting the DCF valuation approach over the alternative methods, and considering an approximate upside potential of '''53.5%''' over a span of 5 years, projections based on Stockhub users' analysis suggest that an investment in UBS Group AG holds the potential for a significant return over the next five years, with an annual return of approximately 10.7%. To simplify, an initial £1,000 investment in UBS could potentially grow to around £1,535.00 in five years, taking into account the estimated upside.
When an investment attains its projected return of 53.5%, which corresponds to an annual return of about '''10.7%''' over the five-year period, it becomes a favorable choice for considering investment in the company.


== Monte-Carlo Simulations ==
== Monte-Carlo Simulations ==
=== Data ===
Introducing our advanced Monte Carlo simulation tailored for analyzing UBS Group AG's stock price behavior. Leveraging this intricate computational approach, our objective is to provide you with insightful insights into the potential trajectory of UBS's stock over time.
[[File:Price paths UBS.png|none|thumb|500x500px|Historical price of UBS' equity]]
The UBS-focused Monte Carlo simulation involves conducting numerous randomized simulations incorporating diverse input parameters, including historical price data, volatility, and essential market variables. By adopting this methodology, we establish a comprehensive probability distribution of potential results, empowering you to evaluate the potential opportunities and risks linked to UBS Group AG investments.
[[File:Log distribution UBS.png|none|thumb|400x400px|Logarithmic distribution of past prices]]
=== Simulations ===
With our simulation, you can make well-informed decisions grounded in data and elevate your understanding of the uncertainty surrounding UBS Group AG's stock behavior. Embrace the cutting edge of equity research, exploring a wide range of potential scenarios to strategically enrich your investment approaches.
[[File:UBS MC paths.png|thumb|500x500px|Price paths of UBS' stock 50 days in the future for 100 simulations|none]]
Through the utilization of our tailored Monte Carlo simulations for UBS Group AG, you gain the ability to visualize multiple pathways across 100 simulations, providing valuable insights into potential outcomes. However, to achieve a more comprehensive and in-depth understanding of the results, we recommend performing a greater number of simulations. This methodology enables us to construct probability distributions that highlight the likelihood of UBS's stock price reaching specific levels. Such an approach guarantees heightened accuracy and insightful analysis, empowering you to make informed decisions with confidence.
[[File:Price distrib UBS.png|none|thumb|500x500px|Final stock price distribution in 50 days for 1,000,000 simulations]]
Moreover, we integrate the computation of the likelihood for UBS Group AG's stock to reach or surpass its current value of $23.73. The resultant probability, measuring at '''48.05%''', suggests that based on historical performance, the stock might be slightly '''overvalued'''.


== Appendix ==
== Appendix ==
===Financial statements===
====Income Statement (In thousands of €)====
{| class="wikitable"
!Income statement
!TTM
!12/31/2022
!12/31/2021
!12/31/2020
!12/31/2019
|-
|Total Revenue
|33,270,000
|33,270,000
|35,059,000
|33,084,000
|28,969,000
|-
|Credit  Losses Provision
| -29,000
| -29,000
|148,000
| -694,000
| -78,000
|-
|Non Interest Expense
|24,582,000
|24,582,000
|25,136,000
|24,163,000
|23,312,000
|-
|Income  from Associates & Other Participating Interests
|32,000
|32,000
|105,000
|84,000
|46,000
|-
|Special Income Charges
|912,000
|912,000
| -691,000
|590,000
| -447,000
|-
|Pretax  Income
|9,604,000
|9,604,000
|9,484,000
|8,226,000
|5,577,000
|-
|Tax Provision
|1,942,000
|1,942,000
|1,998,000
|1,583,000
|1,267,000
|-
|Net  Income Common Stockholders
|7,630,000
|7,630,000
|7,457,000
|6,629,000
|4,304,000
|-
|Average Dilution Earnings
|0
|0
|0
| -1,000
|0
|-
|Diluted  NI Available to Com Stockholders
|7,630,000
|7,630,000
|7,457,000
|6,628,000
|4,304,000
|-
|Basic EPS
|1
|2
|2
|2
|1.17
|-
|Diluted  EPS
|1
|2
|2
|2
|1.14
|-
|Basic Average Shares
|3,712,638
|3,260,939
|3,482,964
|3,583,176
|3,663,278
|-
|Diluted  Average Shares
|3,823,197
|3,397,470
|3,627,241
|3,707,028
|3,767,160
|-
|Rent Expense Supplemental
| -
| -
| -
|813,000
|718,000
|-
|INTEREST_INCOME_AFTER_PROVISION_FOR_LOAN_LOSS
|6,593,000
|6,593,000
|6,852,000
|5,168,000
|4,423,000
|-
|Net Income from Continuing &  Discontinued Operation
|7,629,000
|7,629,000
|7,457,000
|6,629,000
|4,304,000
|-
|Normalized  Income
|6,901,224
|6,901,224
|8,002,199
|6,629,000
|4,304,000
|-
|Total Money Market Investments
|1,378,000
|1,378,000
|513,000
|939,000
|2,005,000
|-
|Reconciled  Depreciation
|2,061,000
|2,061,000
|2,118,000
|2,126,000
|1,940,000
|-
|Net Income from Continuing  Operation Net Minority Interest
|7,629,000
|7,629,000
|7,457,000
|6,629,000
|4,304,000
|-
|Total  Unusual Items Excluding Goodwill
|912,000
|912,000
| -691,000
|590,000
| -447,000
|-
|Total Unusual Items
|912,000
|912,000
| -691,000
|590,000
| -447,000
|-
|Tax  Rate for Calcs
|0
|0
|0
|0
|0
|-
|Tax Effect of Unusual Items
|184,224
|184,224
| -145,801
|0
|0
|}
==== '''Balance Sheet (In thousands of €)''' ====
{| class="wikitable"
!Balance Sheet
!12/31/2022
!12/31/2021
!12/31/2020
!12/31/2019
|-
|Total Assets
|1,104,364,000
|1,117,182,000
|1,125,765,000
|972,183,000
|-
|Total  Liabilities Net Minority Interest
|1,047,146,000
|1,056,180,000
|1,065,929,000
|917,476,000
|-
|Total Equity Gross Minority  Interest
|57,218,000
|61,002,000
|59,836,000
|54,707,000
|-
|Total  Capitalization
|217,142,000
|232,646,000
|259,992,000
|231,839,000
|-
|Common Stock Equity
|56,876,000
|60,662,000
|59,517,000
|54,533,000
|-
|Capital  Lease Obligations
|3,334,000
|3,558,000
|3,927,000
|3,943,000
|-
|Net Tangible Assets
|50,609,000
|54,284,000
|53,037,000
|48,064,000
|-
|Invested  Capital
|246,818,000
|275,744,000
|259,992,000
|231,839,000
|-
|Tangible Book Value
|50,609,000
|54,284,000
|53,037,000
|48,064,000
|-
|Total  Debt
|193,276,000
|218,640,000
|200,475,000
|177,306,000
|-
|Net Debt
|17,117,000
|20,284,000
|42,244,000
|70,238,000
|-
|Share  Issued
|3,524,636
|3,702,803
|3,859,055
|3,859,055
|-
|Ordinary Shares Number
|3,107,727
|3,399,608
|3,551,578
|3,616,034
|-
|Treasury  Shares Number
|416,909
|303,195
|307,477
|243,021
|}
'''Cash Flow (In thousands of €)'''
{| class="wikitable"
|Cash Flow
|TTM
|12/31/2022
|12/31/2021
|12/31/2020
|12/31/2019
|-
|Operating Cash Flow
|14,647,000
|14,647,000
|31,425,000
|36,958,000
|19,705,000
|-
|Investing  Cash Flow
| -12,447,000
| -12,447,000
| -2,119,000
| -6,785,000
| -1,558,000
|-
|Financing Cash Flow
| -9,094,000
| -9,094,000
|10,345,000
|12,432,000
| -25,614,000
|-
|End  Cash Position
|195,321,000
|195,321,000
|207,875,000
|173,531,000
|119,873,000
|-
|Interest Paid Supplemental Data
|8,198,000
|8,198,000
|4,707,000
|6,320,000
|10,769,000
|-
|Capital  Expenditure
| -1,643,000
| -1,643,000
| -1,841,000
| -1,854,000
| -1,584,000
|-
|Issuance of Debt
|79,115,000
|79,115,000
|98,272,000
|80,255,000
|65,047,000
|-
|Repayment  of Debt
| -67,670,000
| -67,670,000
| -79,909,000
| -87,667,000
| -69,401,000
|-
|Repurchase of Capital Stock
| -6,006,000
| -6,006,000
| -3,341,000
| -1,387,000
| -1,559,000
|-
|Free  Cash Flow
|13,004,000
|13,004,000
|29,584,000
|35,104,000
|18,121,000
|}
=== Disocunted Cash Flow (DCF) ===
Outlined below is the Discounted Cash Flow (DCF) analysis for UBS Group AG. The computations have been performed using Bloomberg Terminal.
'''Assumptions:'''
* Revenue Growth Rate: 0%
* Operating Margin: 28.87%
* Tax Rate: 21%
* Discount Rate (WACC): 8.19%
* Terminal Growth Rate: 2%
==== Forecast Period: 5 years Calculate ====
==== Free Cash Flows (FCF) ====
{| class="wikitable"
!Year
!Revenue
!Operating Income
!EBT
!Taxes
!NOPAT
!Depreciation & Amortization
!Operating Cash Flow
!CAPEX
!Working Capital Changes
!Free Cash Flow
|-
|2022
|$33,270,000,000
|$9,609,369,900
|$9,609,369,900
|$2,018,167,879
|$7,591,202,021
|$2,061,000,000
|$9,652,202,021
| -$1,643,000,000
|$18,228,000,000
|$29,237,202,021
|-
|2023
|$33,270,000,000
|$9,609,369,900
|$9,609,369,900
|$2,018,167,879
|$7,591,202,021
|$2,061,000,000
|$9,652,202,021
| -$1,643,000,000
|$18,228,000,000
|$29,237,202,021
|-
|2024
|$33,270,000,000
|$9,609,369,900
|$9,609,369,900
|$2,018,167,879
|$7,591,202,021
|$2,061,000,000
|$9,652,202,021
| -$1,643,000,000
|$18,228,000,000
|$29,237,202,021
|-
|2025
|$33,270,000,000
|$9,609,369,900
|$9,609,369,900
|$2,018,167,879
|$7,591,202,021
|$2,061,000,000
|$9,652,202,021
| -$1,643,000,000
|$18,228,000,000
|$29,237,202,021
|-
|2026
|$33,270,000,000
|$9,609,369,900
|$9,609,369,900
|$2,018,167,879
|$7,591,202,021
|$2,061,000,000
|$9,652,202,021
| -$1,643,000,000
|$18,228,000,000
|$29,237,202,021
|}
==== Discount Cash Flows ====
{| class="wikitable"
!Year
!FCF
!PV Factor
!Discounted FCF
|-
|2022
|$29,237,202,021
|0.9252
|$27,024,994,009
|-
|2023
|$29,237,202,021
|0.8526
|$24,907,452,724
|-
|2024
|$29,237,202,021
|0.7844
|$22,962,979,085
|-
|2025
|$29,237,202,021
|0.7202
|$20,927,732,983
|-
|2026
|$29,237,202,021
|0.6597
|$19,313,711,550
|-
|TV
|$493,077,739,961
|0.6597
|$325,224,847,288
|}
==== Calculation Results ====
{| class="wikitable"
!Calculation Results
!Values
|-
|Equity Value
|$311,028,340,331
|-
|Per Share Value
|$36.43
|-
|Current Stock Value
|$23.73
|-
!Upside
|'''53.5%'''
|}
==== Sensitivity analysis ====
{| class="wikitable"
! colspan="2" rowspan="2" |Sensitivity Analysis
! colspan="7" |Perpetuity Growth Rate
|-
|0.20%
|0.70%
|1.20%
|1.70%
|2.20%
|2.70%
|3.20%
|-
! rowspan="6" |WACC
|7.0%
|$33.77
|$34.60
|$35.46
|$36.37
|$37.33
|$38.34
|$39.41
|-
|7.5%
|$32.98
|$33.70
|$34.46
|$35.27
|$36.13
|$37.04
|$38.00
|-
|8.0%
|$32.24
|$32.83
|$33.47
|$34.16
|$34.89
|$35.68
|$36.51
|-
|8.5%
|$31.55
|$32.01
|$32.52
|$33.08
|$33.70
|$34.37
|$35.10
|-
|9.0%
|$30.90
|$31.26
|$31.67
|$32.12
|$32.63
|$33.18
|$33.79
|-
|9.5%
|$30.28
|$30.55
|$30.87
|$31.24
|$31.66
|$32.13
|$32.67
|}
=== Trading comparables (Comps) ===
{| class="wikitable"
!P/E Ratio
!Estimated EPS
!Estimated Share Price
|-
|Low (4.62x)
|1.96
|$9.06
|-
|Median (8.13x)
|1.96
|'''$15.93'''
|-
|Mean (8.79x)
|1.96
|$17.22
|-
|High (10.28x)
|1.96
|$20.14
|}
== References ==
__INDEX__
__INDEX__
<references />
<references />
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