They note that Morgan Stanley trades at 2.2x of its 2023 TVB, compared to UBS at 1.3x P/TBV. While the return profile for the two banks are also very different near-term, they see UBS generating return on tangible equity (RoTE) of 14% in 2027, versus Morgan Stanley’s 17.5%.
With UBS at a material discount, JPMorgan analysts Kian Abouhossein and Amit Ranjan continue to prefer UBS over Morgan Stanley for wealth management exposure in a global context.
In their March 15 Europe equity research report, the analysts highlight that UBS is part of their European banks top picks portfolio. In their view, UBS’s valuation discount of about 40% to Morgan Stanley on a price to tangible book value (P/TVB) should narrow in the medium-term, although it is not expected to close completely.
