Translation: Original published in Finnish on 8/20/2026 at 9:00 pm EEST.

Despite the slight estimate miss, the H1 report was largely in line with our expectations, and we have made only minor downward revisions to our forecasts. We still expect strong earnings growth from the company in the coming years, and overall, the company's outlook is good. However, the stock has priced this in quite a bit, and the valuation is high by all measures. We reiterate our Sell recommendation and EUR 21.0 target price. 

H1 figures slightly below expectations due to one-offs

UB's H1 revenue was 30 MEUR, slightly below our 31 MEUR estimate. The miss is fully explained by own balance sheet returns (-0.4 MEUR vs. our estimate of 0.5 MEUR), and operationally, revenue was fully in line with our expectations. In Asset and Wealth Management, the fee mix was also in line with expectations, as strong sales of structured products compensated for lower-than-expected performance fees.

Operative EBIT decreased to 8.1 MEUR, falling significantly short of our 9.8 MEUR estimate. Most of the forecast miss is explained by returns on the company's own balance sheet. Expenses were also slightly higher than we expected, as the company made more growth investments than anticipated, e.g., in marketing and recruitment. We consider the growth investments justified, and we believe their results are reflected in the company's very strong gross sales (H1'26: 355 MEUR). The Group's earnings per share decreased to EUR 0.54 (forecast EUR 0.66). Although the bottom line fell short of our forecasts, we believe that asset and wealth management, which is the most critical part of the operations, performed at least reasonably well.

AUM rose as expected to 5.8 BEUR, mainly due to the Fondita and Fourton acquisitions. From a sales perspective, H1 was mixed as expected. Asset management sales continue to perform very well, and the company's service and sales engine are in excellent shape. Correspondingly, sales of alternative funds, in particular, remain at a very subdued level.

Minor estimate revisions

As expected, UB reiterated its guidance and expects its operating profit to be close to or grow from the 2025 level. We moderately lowered our forecasts for the coming years. The H1 miss will impact the current year's figures, and our increased cost estimates (mainly H1'26 recruitments) also weigh on our 2027 forecast, while changes for 2028 are marginal. We still expect strong earnings growth from H2’26 onwards, as acquisitions and strong new sales in asset management significantly increase recurring fees. In 2027, growth should also start to receive more support from the recovering demand for spearhead funds. Overall, we still expect the company to achieve average adjusted EPS growth of around 17% in the coming years. The risk level of our forecasts has decreased somewhat, as the importance of discretionary wealth management for new sales has risen alongside individual spearhead funds. However, the significant share of performance fees weighs on the earnings mix and keeps forecast risks elevated. The dividend flow remains abundant as usual, and the company distributes most of its earnings as dividends.

Valuation already prices in excellent performance

UB's share price has risen very sharply during the summer, and the valuation has climbed to a very high level by practically all measures. In absolute terms, the multiples are well above the company's historical levels, and relative to peers, the valuation has turned to a premium. We find this difficult to justify given the forecast risks associated with the weak earnings mix.

While the valuation could previously be justified by current performance, we believe the current share price now reflects excellent performance for the coming years as well. We see a significant risk that the good earnings growth we are forecasting will largely be offset by a normalization of valuation multiples, leading to a weak return for investors despite strong operational performance.