UBS Raises UniCredit to 'Buy'

UBS Analysts See Significant Upside in UniCredit

Credit Suisse Group AG Also Lifts Target Price

Zurich-based multinational investment bank and financial services company UBS has upgraded its rating on Italian banking group UniCredit to "buy" from "neutral."

The analysts at UBS cited UniCredit's strong capital position, improving profitability, and exposure to rising interest rates as key reasons for the upgrade.

They also raised their target price on UniCredit's shares to €16.50 from €13.50, implying a potential upside of over 20% from the current market price.

Credit Suisse Also Raises Target Price

UBS is not the only investment bank to recently upgrade its rating on UniCredit.

Credit Suisse Group AG also raised its target price on UniCredit's shares to €15 from €13.50, citing the bank's "improving fundamentals" and "positive outlook."

The analysts at Credit Suisse noted that UniCredit's net interest income is expected to benefit from rising interest rates, while its cost of risk is expected to remain stable.

Key Reasons for UniCredit's Upgrade

• Strong capital position
• Improving profitability
• Exposure to rising interest rates
• Positive outlook for the banking sector

UniCredit's CEO, Andrea Orcel, welcomed the upgrade from UBS, saying that it "reflects the progress we have made in recent years."

Orcel added that UniCredit is "well-positioned to benefit from the rising interest rate environment and the improving economic outlook in Europe."

Conclusion

The upgrades from UBS and Credit Suisse are a positive sign for UniCredit and suggest that the bank is making progress in its turnaround plan.

Investors who are looking for exposure to the European banking sector may want to consider UniCredit, which is now rated "buy" by both UBS and Credit Suisse.