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Investing.com - UBS downgraded AIB Group PLC (AIBG:ID) (OTC:AIBRF) from Buy to Neutral on Thursday, while lowering its price target to EUR7.15 from EUR7.55.
The downgrade reflects UBS’s view that AIB shares have limited upside potential, with the new price target implying just 6% upside from current levels. At the target price, AIB would trade at a 2026 price-to-earnings ratio of 9.5x.
UBS cited several factors for its revised outlook, including a slightly lower sustainable return on tangible equity forecast of 13.8%, down from 14% previously, and a higher cost of equity at 11.7%, up from 11.3%, driven by macroeconomic uncertainty.
The investment bank expects AIB’s share price to remain range-bound amid uncertainty surrounding the economic impact on Ireland of global trade policy changes and other announcements from the United States.
UBS also noted that AIB’s net interest income and profits are normalizing in a lower interest rate environment, further constraining potential share price appreciation.
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