NEW YORK (TheStreet) -- Shares of UBS AG (UBS) are down -0.71% in early morning trade after it was reported that the Swiss bank could end up paying $8 billion in fines to settle a probe into rigged currency markets, more than five times what it paid to settle charges it manipulated interest rates, according to a research report, the New York Post reports.
UBS had reportedly been cooperating with regulators in the U.S. and U.K. in hopes of getting a lenient fine.
The research report, issued by Autonomous Research, says that all Wall Street banks could face a total of $35 billion in fines for currency manipulation.
TheStreet Ratings team rates UBS AG as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate UBS AG (UBS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- UBS AG has improved earnings per share by 14.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, UBS AG turned its bottom line around by earning $0.93 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.93).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 38.50% is the gross profit margin for UBS AG which we consider to be strong. Regardless of UBS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.95% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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