UBS Spotlights 29 “Growth at a Reasonable Price” Stocks Amid Evolving Market Trade Risks
Roughly a month after “Liberation Day” and the wave of tariff announcements, market anxiety over trade policy has eased. With U.S.–China tariffs mostly rolled back, attention is now turning to the real-world impact of these changes rather than their political drama.
In a new note, UBS strategists led by Sean Simonds argue that while tariff details are clearer, the real uncertainty now lies in how these policies will play out economically. “We may have moved past the peak of uncertainty,” they write, “but what lies ahead is policy outcome uncertainty.”
UBS modeled its economic outlook on a scenario with a 10% blanket tariff and a 60% tariff on Chinese imports—significantly above current levels, but useful for stress testing. Under this framework, they forecast U.S. GDP growth slowing from 2% in Q1 to just 0.7% by Q4.
Given this murky environment, UBS recommends a balanced approach: steer clear of overpriced, overhyped names but stay open to cyclical growth plays. “Elevated but unclear risks support a value tilt,” they note, “but with continued momentum into 2026, cyclical growth remains relevant.”
Their favored strategy? Growth at a Reasonable Price (GARP). While GARP-focused ETFs like the Invesco S&P 500 GARP ETF have lagged the S&P 500 in recent years, UBS believes a rebound may be underway. “Valuations ballooned over the last decade even as consistent growth became rarer,” they note. “But after the recent reset and broader economic shifts, GARP could stage a comeback.”
UBS screened for 29 GARP-qualified stocks—each with a market cap over $10 billion, trading at an average of 30x estimated 2025 earnings, and offering 19% upside on average. Using the HOLT valuation framework inherited from Credit Suisse, the list focuses on firms with strong operational quality (top 50%), robust growth potential (top 25%), and excludes overvalued or value-trap names.
Among the selections are industry giants like Broadcom (AVGO) and emerging players such as Swiss sneaker brand On Holdings (ONON), backed by tennis legend Roger Federer.
