UBS upgraded DWS Group (ETR:DWSG) to buy from neutral, raising its 12-month price target 25% to €70 from €56, citing stronger earnings and a capital return plan. The brokerage projects €10.16 per share in dividends over 15 months, equal to 17% of current market capitalization. DWS shares climbed 3% following the upgrade, with the stock trading around €58.90.

UBS raised its 2026-28 earnings per share estimates by 7%-12%, positioning the brokerage 1%-3% above consensus. The upgrade follows DWS's strong fourth-quarter 2025 results and management guidance that total costs in 2026 will remain flat compared with 2025. Central to the bull case is a forecast €4-per-share special dividend, roughly €800 million, expected in early 2027 after management announced returning a substantial part of the company's excess capital.

UBS projects adjusted net earnings rising from €939 million in 2025 to €1.189 billion in 2028, with year-over-year growth of roughly 7%-9%. The brokerage also highlighted structural tailwinds from potential German pension reforms and the company's strong passive product growth, which accounted for €395 billion of €1.084 trillion in assets under management. With passive funds expected to drive €158 billion of €188 billion in total net inflows over 2026-28, UBS sees DWS well-positioned for continued expansion.