Does Recent Swiss Banking Volatility Offer an Opportunity in Vontobel Holding for 2025?

If you have been keeping an eye on Vontobel Holding, you are not alone. Investors and analysts alike are sizing up whether now is the right time to make a move on this financial stock. After climbing an impressive 14.1% over the past year, the stock has cooled off slightly in 2024, down 5.0% year-to-date. The past month has seen the price nudge down by 1.1%, though it has been steady over the last week with a 1.2% gain. This mix of short-term hesitation and long-term growth might seem puzzling, but recent moves in the European banking sector and shifting risk perceptions have influenced companies like Vontobel Holding more than you might expect.

Diving into the numbers, the company currently has a value score of 5 out of 6, meaning it ticks the undervalued box on five separate valuation checks. That is a strong signal, suggesting that the market may not have fully recognized the strength beneath the surface. Whether you are weighing up a new buy or reassessing your current position, understanding how this value score is calculated is key. Next, we will break down the main valuation approaches that go into this score. Stay tuned, as there is an even more insightful perspective on valuation coming later in the article.

Why Vontobel Holding is lagging behind its peers

Approach 1: Vontobel Holding Excess Returns Analysis

The Excess Returns valuation model examines how much value a company generates over and above the cost of its equity capital. In Vontobel Holding’s case, this method focuses on the company’s ability to earn more than what it pays to its shareholders by measuring return on equity and growth in book value per share.

For Vontobel Holding, the key figures are as follows:

• Book Value: CHF39.69 per share
• Stable Earnings Per Share (EPS): CHF5.84 per share (Source: Weighted future Return on Equity estimates from 4 analysts.)
• Cost of Equity: CHF3.42 per share
• Excess Return: CHF2.43 per share
• Average Return on Equity: 11.27%
• Stable Book Value: CHF51.87 per share (Source: Weighted future Book Value estimates from 2 analysts.)

By generating an excess return of CHF2.43 per share, Vontobel Holding demonstrates its ability to deliver shareholder value sustainably above its cost of capital. The model projects an intrinsic value per share of CHF91.38.

This estimated value is 33.5% higher than the current market price, indicating that the stock is significantly undervalued on this basis.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Vontobel Holding.

Our Excess Returns analysis suggests Vontobel Holding is undervalued by 33.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Vontobel Holding Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used metric for valuing profitable companies like Vontobel Holding. It shows how much investors are willing to pay for a franc of earnings, and is especially insightful when the business generates consistent profits. Because it reflects the market’s expectations for growth and captures perceived risks, the PE ratio becomes an effective tool to assess whether a stock offers value compared to its peers or the wider industry.

Vontobel Holding currently trades at a PE ratio of 13.6x, which is noticeably below the Capital Markets industry average of 19.6x and also trails its listed peer group average of 17.3x. At first glance, this discount might signal an undervalued stock. However, multiples must be interpreted in light of a company’s specific characteristics, such as growth outlook, stability, and risk profile. These factors all influence what a truly “fair” PE should be.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio is designed to move beyond simple peer or industry comparisons by calculating a bespoke multiple based on factors like Vontobel Holding’s earnings growth, profit margins, risk level, industry dynamics, and market cap. For Vontobel Holding, the Fair Ratio is 17.2x. Notably, this is higher than its actual PE of 13.6x, indicating the market may be underestimating the company’s positive outlook and fundamentals, even after considering all relevant factors.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Vontobel Holding Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative is essentially your personal story or thesis about a company, where you connect what you believe about Vontobel Holding’s prospects, such as digital innovation, efficiency measures, or market risks, to a financial forecast and ultimately a fair value for the shares. Rather than relying solely on consensus numbers or simple valuation metrics, Narratives help you translate your big-picture view into concrete estimates for future revenue, profits, and margins, leading to your own fair value calculation.

This approach is easy and accessible on Simply Wall St’s Community page, already used by millions of investors worldwide. Narratives let you make informed buy and sell decisions by directly comparing your own fair value to the current price. This gives you a framework for action whenever the facts change. As new updates like earnings or news emerge, Narratives are immediately updated with fresh data so your investment story stays relevant and actionable.

For Vontobel Holding, analyst Narratives currently range from a more cautious price target of CHF58 to a confident outlook of CHF70. This shows how different investors can reach very different views on the company’s future and whether the current price of CHF60.6 is appealing or not.

Do you think there's more to the story for Vontobel Holding? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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