UBS stock price forecast for Q3 after impressive Q2 results

UBS Group AG (NYSE:UBS) shares bounced off $14.42 to trade at about $15.30 on Tuesday after the company reported better than expected operating income. 

The Zurich-based investment bank reported $8.98 billion (CHF 8.28 billion) in operating income up 21.4% from the same period a year ago, beating the consensus Street estimate by $660 million (CHF 608.30 million).

UBS reported a 63% increase in net income to $2.01 billion, again outperforming analyst expectations of $1.32 billion. However, the company’s diluted GAAP EPS of $0.55 was below the expectation of $0.59.

Should you buy UBS stock in Q3 2021?

From a valuation perspective, UBS shares trade at an attractive trailing P/E ratio of 7.94, making the stock a perfect buy for value investors. In addition, analysts expect UBS earnings per share to grow by 54.80% this year before increasing by a paltry 6.73% next year. 

The company’s forecasted 5-year average earnings growth rate of about 3.40% makes the stock less attractive to growth investors. However, this is significantly better than the previous 5-year average annual growth rate of just 1.50%. So, there are some positives to pick out, given the current circumstances.

In summary, though UBS shares are not compelling to growth investors, value investors will be interested, at least in the short term. Furthermore, the company’s lucrative dividend yield of 4.28% will attract dividend investors.

Technical overview: Why buy UBS shares in Q3 2021?

Technically, UBS shares appear to have recently bounced back to avoid dropping to overbought conditions of the 14-day RSI. The company’s stock price has fallen below the 100-day moving average but seems poised to climb above it after Tuesday’s rebound.

Therefore, UBS stock appears perfectly poised for investors to target extended rebound profits at $15.71 or higher at $16.23. The key support levels are $14.87 and $14.42.

Bottom line: the catalyst for buying UBS shares now

UBS shares have recently bounced back after an impressive quarterly report. The company’s net income growth drove Tuesday’s stock price spike and could push it back above the 100-day moving average. 

In addition, the rebound is yet to hit overbought conditions, leaving more room for upward movement.