The US firm, which has an “overweight” recommendation on UBS’s stock, has a price target of SFr20.0. (As at the close of 28 July, the price was SFr16.56.) The firm predicts UBS will achieve earnings per share of SFr1.67 this year and SFr192 in 2011. Based on consensus methodology, it gives UBS a price/earnings multiple of 10.5 and 9.1 for this year and next year respectively.

Earlier this week, UBS said that client outflows from its closely-watched wealth management arm decelerated further in the second quarter to SFr5.2 billion (around $4.96 billion), compared with SFr8.0 in the previous three months.  Within the Wealth Management segment, there were net inflows in the Asia Pacific region, from ultra high net worth clients, and in certain European locations, the Zurich-listed bank said. Overall, there was a slightly net outflow in Europe. In Wealth Management Americas, there was a net outflow of SFr2.6 billion, but far less than the outflow of SFr7.2 billion in the previous three months.

“UBS remains one of our 'best ideas' in European financials, as a credible restructuring story, geared to global rather than just European with good capital generation/book value growth potential,” said analysts Huw van Steenis and Hubert Lam in a note.

“As we argued in June a key point,” it said.

“We expect UBS to have slower outflows throught 2010 and reaching flat flows by Q4. We are impressed by the significant improvement in Q1 driven by inflows from Asia and UHNW. We only see a return to positive flows in 2011 as we expect the shift from offshore to onshore to continue to have a negative impact on flows offset by inflows in APAC and UHNW,” it added.