Update shared on 17 Nov 2025
Fair value Decreased 5.11%Analysts have lowered their fair value estimate for United Overseas Bank by approximately S$1.92 to S$35.73. They cite growing concerns about asset quality and increased earnings risk, which limit the stock’s upside potential.
Analyst Commentary
The recent shift in analyst sentiment towards United Overseas Bank reflects increased scrutiny of the bank's future prospects. While there are areas for optimism, analysts remain divided on the stock's potential based on several fundamental factors.
Bullish Takeaways
- United Overseas Bank has historically demonstrated stable Return on Equity and has outperformed local peers over the past two decades.
- Analysts note that operational resilience and disciplined risk management have contributed to the bank's strong long-term performance.
- Despite the reduction in price targets, some see relative valuation support because of its established market presence in Singapore and the region.
Bearish Takeaways
- Increasing concerns about asset quality are prompting a more cautious view. The risk of future credit issues is limiting upside potential.
- Recent earnings risk, particularly related to the stability of earnings per share, is seen as a catalyst for potential weakness in the share price.
- Price targets have been revised downward, with major firms highlighting that risks to growth and margins could persist through upcoming quarters.
- Bearish analysts caution that, compared to peers, United Overseas Bank may face a more challenging environment for sustaining premium valuations if current trends continue.
What's in the News
- Wee Hur Holdings Ltd. has selected United Overseas Bank Limited and DBS Bank Ltd. as joint lead managers and bookrunners for its Series 001 Notes. Shanghai Pudong Development Bank Co. Ltd. Singapore Branch has been named as a co-manager for the issuance (Client Announcements).
Valuation Changes
- Fair Value Estimate has declined from SGD 37.66 to SGD 35.73. This reflects a modest downward adjustment in analysts' outlook.
- Discount Rate has decreased slightly from 7.03 percent to 6.98 percent, indicating a marginally more favorable view of risk.
- Revenue Growth projection has risen significantly from 6.21 percent to 9.38 percent, suggesting stronger expectations for top-line expansion.
- Net Profit Margin estimate has edged down from 42.05 percent to 41.43 percent, pointing to a more conservative outlook on profitability.
- Future Price-to-Earnings (P/E) Ratio is relatively steady, moving from 11.14x to 11.19x. This signals little change in expected market valuation relative to earnings.
Disclaimer
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