UBS posted the biggest decline on the SMI on the Zurich Stock Exchange on Wednesday following Morgan Stanley's decision to downgrade its recommendation on the stock from "equal weight" to "underweight," with a target price reduced from 28 CHF to 26 CHF.

In a note, the broker said it believed that the share price of the world's second-largest wealth manager would continue to come under pressure due to uncertainty surrounding the group's capital distribution plans.

These concerns led the analyst to lower its share buyback forecast from FY 2026 and beyond to $3bn p.a..

Morgan Stanley adds that many of its clients are wondering whether it is time to buy the stock given its underperformance YTD.

The professional responds that this phenomenon is not only due to questions surrounding the Swiss institution's capital situation, but also to a business trend that is less favorable than that of other European banks.

At lunchtime, the stock was down about 2%, underperforming the SMI (down about 0.4%). YTD, the stock has lost nearly 9%.


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