6 big analyst calls today: UBS gets mixed reaction after Credit Suisse | Pro Recap

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By Davit Kirakosyan

Investing.com -- Here is your daily Pro Recap of the biggest analyst rating changes you may have missed on since Friday’s close.

UBS earns rating changes following Credit Suisse acquisition announcement

UBS Group (SIX:UBSG) received one analyst upgrade and two downgrades after announcing its acquisition of Credit Suisse (SIX:CSGN) for around $3.3 billion with the help of Swiss regulators.

Swiss authorities oversaw tense negotiations over the weekend due to concerns about the health of the Swiss banking system and the potential for contagion in global markets. Credit Suisse, which is Switzerland's second-largest bank after UBS, had been approaching the brink of collapse despite receiving an emergency credit line from the Swiss National Bank last week.

ODDO BHF downgraded UBS to Underperform from Neutral, noting "very limited due diligence" around the merger deal and the impact the integration of Credit Suisse's operations will have on its growth initiatives.

KBW downgraded the bank to Underperform from Market Perform, noting, in particular the suspension of UBS' share buybacks, which it believes was a key part of the investment thesis in the company. They warned as well that the Swiss government's decision to write off $17B in Credit Suisse's additional tier-one debt will "unsettle" some investors.

Meanwhile, BofA Securities upgraded UBS to Buy from Neutral.

UBS shares are currently trading more than 7% lower on the Swiss Stock Exchange, while Credit Suisse plunged another 60% this morning after experiencing heavy selling last week.

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Pepsico upgraded at Bernstein

Bernstein upgraded PepsiCo (NASDAQ:PEP) to Market Perform from Underperform.

The firm initially gave Pepsi an Underperform rating in 2021 due to concerns about problems within its beverage division.

However, the firm now admits they were wrong. Despite continued poor competitive data and margins that are far from management's target, the company's strong pricing-led category growth during the pandemic caught the analyst offside. “But that would be missing the forest for the trees. Through the pandemic, Pepsi has delivered the strongest organic growth across mainstream US staples. And what's more, we do now see signs of improvement in beverages,” said the firm.

US Steel upgraded to Peerperform

Wolfe Research upgraded United States Steel (NYSE:X) to Peerperform from Underperform after a recent drop in share value, which contrasts with sharply higher sheet steel prices in recent weeks.

The firm continues to see pricing resilience through Q2, driven largely by light supply. “While we expect capacity to ramp up and H2E demand to soften, current market strength could last longer than we expected, as has been our experience with market swings in the past,” added the firm.

Roper Industries started with a Buy rating at Truist

Truist Securities initiated coverage on Roper Technologies (NYSE:ROP) with a Buy rating and a price target of $510.00, expecting mid-single-digit organic and mid-to-high-single-digit total top-line growth over a multi-year period.

“Through divestitures and acquisitions, Roper has progressed from software making up ~41% of sales in 2018, to now having 75% of sales coming from software (~80% is recurring),” said the firm.

2 more upgrades

Edward Jones upgraded Meta Platforms (NASDAQ:META) to Buy from Hold.

Williams Trading upgraded VF Corporation (NYSE:VFC) to Buy from Sell.