UBS equity outlook 2026

Back off, bears

UBS analysts say the likelihood that the Reserve Bank of Australia (RBA) is at or near the end of the easing cycle is not a reason to get overly bearish on the Australian equity outlook.

Equity strategist Richard Schellbach has highlighted a market ‘melt-up’ scenario over the past 18 months, where equity prices continued to rise despite high valuations and moderate economic growth.

Schellbach is optimistic that equity markets can continue to perform in 2026, telling ausbiz on the sidelines of the 2025 UBS Investor Conference in Sydney that artificial intelligence (AI) is the key thematic driving global markets at present, similar to the late-1990s dot-com boom.

Equity market index

Banking on it

Schellbach sees data centres and the broader technology sector as the main beneficiaries of the AI-fuelled boom.

When it comes to the age-old question of banks versus miners, he’s more constructive on the materials sector, with a specific interest in Newmont.

Newmont Corp (ASX:NEM)

Newmont’s Australian-listed shares are up almost 95% over the past 12 months, rising sharply thanks to the continued upside in gold prices.

Newmont daily candlestick chart

Analysts are bullish on the stock rising even more, with the average target price at $148.48 according to Refinitiv, which suggests a 14% upside from current levels.

ASX Tradewatch data show the technical picture for Newmont is mixed, with both the 20-day and 200-day moving averages (MA) trending higher, another bullish sign for the stock. However, the 50-day MA shows weakness in the medium term as the 5-day MA is below this momentum.

Newmont historical trends and price targets

Westpac (ASX:WBS)

UBS is underweight the financial sector but has a preference for Westpac due to its relative value and earnings quality.

Westpac daily candlestick chart

Shares appear to be in a long-term uptrend, according to technical data suggesting the stock can rally in both the shorter 20-day MA and longer 200-day MA timeframes.

Overall, analysts surveyed by Refinitiv are fairly negative on the stock, with the average target price of $34.06 suggesting a near 14% drop from current levels and the average broker recommendation is 'sell'.

Westpac historical trends and price targets

Santos (ASX:STO)

When it comes to energy, UBS is cautious on crude oil prices in the near term.

Energy analyst Tom Allen says the macroeconomic picture has been challenging for the oil market in 2025. Allen's preferred pick in the energy sector is Santos, which has fallen around 3% over the past 12 months.

Santos daily candlestick chart

Shares appear to be in a long-term bearish trend, meaning investors see little opportunity in owning the stock at present. However, analysts like UBS’s Allen see upside, with the average broker target price of $47.56 suggesting the stock can rally another 18%.

Santos historical trends and price targets

Origin Energy (ASX:ORG)

When it comes to the utilities space, Allen and UBS prefer Origin over AGL but see near-term upsides for both stocks.

Technical data show that while Origin’s 200-day MA is trending higher, there is significant evidence that the bullish trend is nearing an end.

Origin Energy daily candlestick chart

Recent price action shows a lack of strength, with the 5-day MA below the 50-day MA and the 20-day MA also moving lower.

The average broker target is $12.46, suggesting the stock can rise a further 4%.

Origin Energy historical trends and price targets