UBS maintains a Neutral view on UK equities despite attractive 12.5x forward P/E valuations and 11% forecasted earnings growth. The bank favors global markets with higher structural exposure to themes like AI and defense, which the UK currently lacks in aggregate.
Key Takeaways
- 1.The UK equity market has a supportive backdrop with reasonable valuations (12.5x forward P/E) and accelerating earnings growth forecasted at 11% for 2026.
- 2.UBS maintains a Neutral rating on UK equities, preferring markets with higher structural growth exposure to themes like AI or more cyclical recovery potential.
- 3.Sector preferences in the UK include Industrials, IT, and Real Estate (Attractive), with recent upgrades to Health Care and Consumer Discretionary.
Table of Contents
- UK equities
- Central scenario
- CIO themes
- Preferences
- Upside scenario
- Downside scenario
- Global asset class preferences definitions
- Appendix
- Risk information
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Authors
Matthew Gilman
Securities
UKX
Themes
AIEnergy & CommoditiesEuropean LeadersLuxury & Lifestyles
Regions
UKEuropeUnited Kingdom