UBS sees upside potential for Swiss equities in second half

UBS said Swiss equities, represented by the Swiss Market Index, still have upside in the second half of 2026 after gaining a little over 10% in the first half. The bank sees 8% earnings growth this year, in line with consensus, and 5% next year, below consensus, but argues valuations remain supported because SMI companies are more profitable than their long-term average. UBS also pointed to improving manufacturing PMIs in Switzerland and the US, suggesting better industrial activity. While summer months may bring more volatility, UBS advised treating pullbacks as buying opportunities rather than chasing rallies. The overall message is constructive for Swiss stocks, especially high-quality, profitable large caps and selected mid-caps/cyclicals, with a dividend yield around 3% adding support.