2024-05-06 00:13:00 ET
UBS (NYSE: UBS) stock price has suffered a harsh reversal in the past few days as investors wait for the coming financial results. Its American ADRs peaked at $31.27 on March 11th and have crashed by over 13% to $27.17. Its stock in Switzerland has dropped from the year-to-date high of CHF 27.88 to CHF 24.50.
UBS earnings ahead
UBS share price will be in the spotlight this week as it publishes its financial results. These numbers will be important as they come at a time when the company is continuing its integration with Credit Suisse.
The most recent results showed that UBS’s revenue rose to $11.8 billion in the fourth quarter, up from $8 billion in the same period in 2022. However, the company moved from a net profit of $1.6 billion to a loss of over $263 million. In all, its Credit Suisse integration has cost it over $1 billion.
UBS’s total revenue in the Global Wealth Management retreated by 3% to $53 billion leading to a profit before tax of $778 million. Its personal and corporate banking revenues dropped slightly to $2 billion while the profit before tax rose to $794 million even as deposits rose to $273 billion.
Its asset management revenue rose by 7% to $805 million as its invested assets jumped to $1.64 trillion.
The next important catalyst for the UBS stock price will be the upcoming financial results on Tuesday. Analysts expect its results to show that its revenues rose by 28% YoY in Q1 to $11.5 billion. For the year, the revenue guidance is expected to be $45 billion up from $40 billion in 2023.
UBS has made several important headlines in the past few months. First, the company was forced to pay $1.4 billion by the Justice Department for its role in the 2008 housing crisis in the US.
The other news is that Ulrich Korner, the final CEO of Credit Suisse is expected to leave the company soon. While he wanted to leave early, he was asked by the UBS management to stay for a while.
UBS is also slashing its workers, intending to get to 85,000 by the end of the integration process. That means that the management will need to slash over 35k jobs in the next few months.
UBS is also facing lawsuits from hedge funds like Appaloosa for the $17 billion wipeout of Credit Suisse’s $17 billion bonds.
UBS stock price forecast
The daily chart shows that the UBS share price has come under intense pressure in the past few weeks. This retreat happened after the stock jumped to a high of $31.35 in April.
A closer look shows that the stock formed a double-top pattern at that level. The double-top pattern is one of the most bearish signs in the market. It is now trading at the neckline of this pattern at around $26.20.
On the positive side, the stock has remained above the 23.6% Fibonacci Retracement point and the 50-day Exponential Moving Average (EMA). It has also formed a small hammer pattern, which is a popular bullish reversal pattern.
Therefore, if it closes above Friday’s close of $27.17 on Monday, it will raise the possibility of it rising after earnings. Because of the double-top pattern, the stock will likely have a bearish breakout, with the key point to watch being the 23.6% retracement point at $25.
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