Investing.com -- Investment bank Jefferies downgraded Julius Baer (SIX: BAER ) shares to Hold from a previous Buy rating and adjusted the price target to CHF 58 from CHF 54.

The company's shares fell more than 2% in European trading Wednesday.

The revision comes as the firm awaits a strategic update from the new CEO, Stefan Bollinger, anticipated before the summer break.

Jefferies analysts have taken a neutral stance due to a perceived narrow range of strategic options available to the company beyond further cost-saving measures.

The downgrade reflects the stock's current price, which Jefferies analysts believe “now reflects its incremental cost efficiency measures as well as a lack of near-term share buyback.”

Bollinger, who has been CEO for less than a month, is expected to outline a strategic vision emphasizing client focus, a return to the company's roots with a technological edge, disciplined entrepreneurship, a performance and ownership-led culture, and an attractive environment for talent.

Jefferies has also taken into account the ongoing review by the Swiss Financial Market Supervisory Authority (FINMA), which opened proceedings against Julius Baer following investigations that began in 2023.

“The regulator does not have the power to fine lenders, but can reprimand them, confiscate profits or remove banking licenses. For now, the company talks cautiously with respect to capital returns,” analysts including Tom Mills explained.

Alongside the downgrade, the analysts have also revised their adjusted earnings per share (EPS) estimates for 2025 and 2026, reducing them by 8-11%.

This adjustment factors in the disposal of Julius Baer's Brazilian operations and anticipates a modest increase in gross margin by 2026. The cost-income ratio (CIR) is expected to remain above 70% in 2025 but improve to 68% in 2026 as the company realizes more cost efficiencies. Additionally, the tax rate assumption for both years has been increased to 19%.

In their valuation, Jefferies assumes no share buyback for fiscal year 2025, followed by a larger buyback in 2026 and 2027.