UBS (SWX: UBSG) stock price has recovered modestly recently as the firm benefited from the crisis at Credit Suisse. As you will see below, the stock jumped to 20 francs, the highest point in years. It has risen by over 160% in the past three years, outdoing the FTSE, Dow Jones, and the Swiss Market Index. Further, the shares have done better than most banks like Goldman Sachs, and Barclays. The stock jumped after the firm published strong results and a $5 billion share buyback.
I wrote about Credit Suisse in October last year as the stock plunged. At the time, there were concerns that the bank would collapse. In the article, I warned that I preferred UBS because of its strong financial performance and market share in wealth management.
On Tuesday, UBS confirmed that its business was firing on all cylinders despite the rising headwinds in the global economy. The company also showed that it benefited from the turmoil facing Credit Suisse as most of its customers defected. Credit Suisse customers were concerned that the bank would collapse.
UBS, unlike other banks, deals with wealthy people, who are usually mostly immune to swings of he global economy. And because of the company’s reputation, these inflows have been increasing in the past few months. For example, inflows in the fourth quarter increased by 8% to $23 billion. Inflows rose by $60 billion for the full year.
In addition to this, assets in its asset management industry jumped by $16 billion in Q4 and over $25 billion for the full year. The company’s revenue dropped slightly by about 8% because of forex. Its net profit was about $1.7 billion while total deposits increased by 6%. The management believes that the company will do well this year as China recovers. In a note, the company’s CEO said:
“Now the easing of COVID-related restrictions in China has led to a more optimistic outlook for 2023. We believe 5% economic growth is back on the table for China and are accelerating beginning in the next few months.”
UBS stock price forecast
Turning to the weekly chart, we see that the UBS share price has been in a strong bullish trend in the past few months. The stock is trading at 19.78, which is notable for two main reasons. First, it is the upper side of the cup and handle pattern that has been forming. It is now in the handle section. Second, this price coincides with the highest level on June 18 2022.
Further, the shares have moved above all moving averages. The 50-week and 200-week have formed a golden cross. Therefore, the outlook of the stock is extremely bullish, with the next key level to watch being at 22 francs. A stop-loss for this trade is at 18 francs.
UBS share price 1D analysis
On the 1D chart, the UBS share price has been in a strong bullish trend in the past few days. As it rose, it moved above the crucial resistance points at 17.77 (November 25) and 18.50 (March 31 high). It has also formed an ascending channel shown in red and risen above the 25-day and 50-day exponential moving averages.
Therefore, a brief pullback to 18.50 will be a welcome move and will be healthy for the shares. This will be part of a break and retest pattern. For this year, the shares will then surge to about 25 francs.