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On Tuesday, Deutsche Bank (ETR:DBKGn)’s analyst Benjamin Goy adjusted the price target for Julius Baer Group Ltd . (BAER:SW) (OTC: OTC:JBAXY), reducing it from CHF68.00 to CHF63.00 while maintaining a "Buy" rating on the stock. Currently trading at $12.23 with a market capitalization of $12.47 billion, the company’s revision follows its mixed second-half 2024 financial report and a subsequent conference call that presented a cautious outlook for 2025. InvestingPro data reveals several more key insights about Julius Baer (SIX:BAER)’s current position and future prospects.
Julius Baer’s management provided guidance that was more reserved than expected, particularly concerning net new money, gross margin, and the cost/income ratio. The stock currently trades at a P/E ratio of 30.37, indicating a relatively high earnings multiple. Additionally, the likelihood of no share buybacks and a projected higher tax rate in the coming years prompted Deutsche Bank to decrease its earnings per share (EPS) estimates for Julius Baer by 5% for 2027 and up to 12% for 2025.
The bank’s stock performance was further influenced by the broader market downturn on Tuesday, which compounded the impact of the revised financial forecasts. InvestingPro data shows the stock has taken a significant hit, dropping 12.39% over the past week. Despite last week’s positive but unconfirmed press reports, the market sell-off reflected the tempered expectations set by the company’s management.
In his comments, Goy noted that while the adjustments to the 2025 earnings estimates are substantial, there is still confidence in Julius Baer’s potential for unique improvements. The new CEO of Julius Baer has outlined priorities that are seen as favorable, and the firm is expected to benefit from its exposure to capital markets, with the strength of the US dollar providing some support on the day of the market sell-off. According to InvestingPro, the company has maintained dividend payments for 16 consecutive years, demonstrating long-term financial stability, while its overall financial health score is rated as FAIR.
In other recent news, Julius Baer Group has been a focal point following a series of developments. Morgan Stanley (NYSE:MS) has revised its price target for the company, reducing it to CHF59 from the previous CHF65, while maintaining an Equalweight rating. This adjustment was made as the analysts modified their earnings per share and capital expectations for the company. The conclusion of the FINMA Review and the forthcoming Strategy Update were identified as key events that could significantly influence Julius Baer’s future direction.
On the other hand, Citi has maintained a Buy rating on Julius Baer, raising the price target to CHF61.40 from CHF60.00. This adjustment was credited to better-than-expected net new money flows and investor positioning. The earnings per share estimates for Julius Baer were slightly adjusted, with a 4% decrease projected for 2024 due to lower earnings and a 1% to 2% adjustment for the years 2025 to 2028.
These are recent developments for Julius Baer. The company’s shares are seen as attractive due to several factors, including an expected 8% per annum total yield over the years 2025 to 2027 and potential for mergers and acquisitions. The company is also set for solid organic growth with approximately 4% net new money growth.
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