UBS shares surge on Morgan Stanley upgrade

The wirehouse's stock hit its highest level since 2008 after an analyst upgraded it to overweight, predicting a revival in deal-making.

UBS Group shares hit their highest levels since the financial crisis on Friday as the stock gained a new bull in Morgan Stanley.

Analyst Giulia Aurora Miotto upgraded the stock to overweight for the first time since assuming coverage last year, predicting that a revival in deal-making will see the Swiss bank’s shares surge more than 25% in the next year. UBS shares rose as much as 5.5% to the highest since May 2008.

“The stars are aligned for investment banking and wealth management to outperform,” Miotto said in a note.

UBS shares have soared nearly 60% since agreeing to take over former rival Credit Suisse last year in a $3.2 billion deal, and Morgan Stanley sees further to go. The bank’s new price target of 33 francs is among the highest of analysts tracked by Bloomberg.

While 2024 and 2025 will be “transitional” years for the Zurich-based lender, growth in UBS’s wealth management business and the scope for future shareholder returns are reasons for optimism.

“We like the wealth management business long term, as a rare area of structural growth in European banking,” Miotto added.