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NEW YORK (TheStreet) -- UBS (UBS) - Get UBS Group AG Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UBS AG (UBS) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Capital Markets industry average. The net income has decreased by 9.7% when compared to the same quarter one year ago, dropping from $718.53 million to $649.15 million.
- The gross profit margin for UBS AG is currently extremely low, coming in at 10.67%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 8.90% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $3,850.77 million or 80.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, UBS has underperformed the S&P 500 Index, declining 18.63% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Capital Markets industry and the overall market, UBS AG's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: UBS Ratings Report