Goldman Sachs has moved UBS Group from a Buy rating to Neutral, saying the scope for efficiency-driven outperformance has narrowed as UBS progresses into the later phases of integrating Credit Suisse. The change in stance follows UBS's fourth-quarter 2025 results, which topped company-compiled consensus net profit on stronger revenue contributions from Global Markets and Global Wealth Management, while expenses came in line with expectations.
In its assessment, Goldman Sachs noted that UBS provided further granularity on the remaining milestones of the Credit Suisse integration and laid out a profitability roadmap through 2028. That guidance, Goldman said, broadly aligns with existing consensus figures and therefore does not leave much room for surprise upside.
Goldman Sachs explained that its earlier Buy recommendation had been premised on expectations of above-consensus efficiency gains and a more robust medium-term rise in profitability. With the bank now entering the later integration stages, the brokerage sees a shift in how savings will be used: an increasing portion of efficiency gains appears likely to be reinvested into the business rather than being passed straight through to higher-than-expected earnings.
The analysis from Goldman highlights that anticipated future cost reductions will mainly be realized within UBS's core franchises, such as Global Wealth Management and Personal & Corporate Banking. By contrast, divisions designated for wind-down, notably the Non-Core and Legacy unit, are not expected to be the principal sources of further savings.
Because of that reallocation of savings toward reinvestment, Goldman Sachs concluded the potential for earnings to outpace consensus is diminished compared with earlier phases of the integration cycle. UBS's own 2028 guidance points to a reported cost/income ratio of about 67% and a return on CET1 capital of around 18% - numbers Goldman Sachs says are broadly in line with pre-results consensus.
Goldman also drew attention to external uncertainties that continue to weigh on UBS's risk profile. The brokerage cited ambiguity around upcoming changes to the Swiss capital regime, noting that full clarity may not arrive until after the end of 2026. In addition, Goldman flagged an ongoing court case tied to the 2023 write-down of Credit Suisse AT1 instruments. Either development, Goldman warned, could restrict capital available for investment or shareholder returns and limit flexibility in deploying capital outside Switzerland.
Alongside the rating change, Goldman Sachs trimmed its 12-month price target for UBS to SFr38 from SFr41.50. At the time of the report, UBS shares were trading at SFr34, which Goldman said implied upside of about 11.8% to the new target. The brokerage noted that since adding UBS to its Buy list on March 30, 2022, the shares have risen roughly 89%, compared with a gain of approximately 38% for the FTSE World Europe index.
On valuation metrics, Goldman Sachs calculated UBS was trading at about 10.6 times earnings based on 2027 company consensus, versus roughly 10 times for the broader European banks sector. Goldman said that relative valuation leaves the risk-reward profile more finely balanced at current price levels.
Goldman reiterated that UBS remains profitable and well capitalized, highlighting a reported CET1 ratio of 14.4% in 2025, rising to 15.2% in 2026 before declining to 13.3% in 2027 under its forecasts. Nonetheless, with consensus estimates now closely aligned and efficiency tailwinds moderating, Goldman Sachs said a Neutral rating is a more appropriate reflection of the present outlook.
Summary
Goldman Sachs downgraded UBS to Neutral after the bank delivered fourth-quarter 2025 results that beat company-compiled consensus for net profit, while providing 2028 guidance largely consistent with market expectations. The brokerage said expected efficiency gains are increasingly being reinvested, reducing the chance for earnings to exceed consensus. Goldman also lowered its 12-month price target to SFr38 and emphasized regulatory and legal uncertainties that may limit capital flexibility.