UBS Downgrades BBVA to Neutral, Cuts Target 8%

UBS downgraded BBVA to neutral from buy, reducing 12‑month price target to €20.5 from €22.3 (~8% cut).
UBS trimmed BBVA’s adjusted EPS forecasts 1‑2% for 2026‑2028 due to higher loan‑loss provisions (2‑4%) and increased Mexican tax rate.
Turkey risks flagged; 50% oil price rise could hinder disinflation, UBS sees inflation 28% (2026) and 23% (2027) with policy rates 33%/28.5%.
UBS expects BBVA’s CET1 ratio to fall to 12.2% by 2028, payout 73% average 2025‑28, and prefers Santander in Spain.