Deutsche Bank AG
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Deutsche Bank LONG

Long from $12.98

Market Cap - 26.57B
Beta - 1.63
Debt/Capital - 71.77%
P/B - 0.32

- Based in Frankfurt, Deutsche Bank is the largest bank in Germany and one of the largest financial companies in world with €1.48T in total assets.
- Over the past six months, Deutsche Bank shares have had a rocky journey underperforming the industry by quite some distance. Their first quarter results in 2018 mainly showed lower revenues, primarily due to exchange rates and larger expenses.
- The banks profitability might still be threatened by a slow moving European economy and operating costs and also low interest rates.
- However, their efforts to improve their financials by reducing expenses and getting rid of unprofitable business will start to draw attention to the company in an encouraging manner.
- The new Chief Executive Officer appointment remains very confident in turning the company around quickly.
- In 2014 and 2015 DB reported better net revenue YoY. Although, in 2016, 2017 and 1Q18 revenues declined. Despite the recent declines in revenues, we believe DB will witness revenue growth in the quarters to come.
- Deutsche Bank continues to focus on strengthening their capital position. In the stress test carried out by the EBA (European Banking Authority) it showed progress in its risk profile and capital position. In 1Q18 capital ratios remained strong. The company continues to achieve its targets - CET 1 (Common Equity Tier 1) ratio of at least above 13% at the end of this year and its leverage ratio at a minimum of 4.5% for this year too.
- Deutsche Banks price to book is much lower than the industry average and at 0.32 could indicate that the equity is undervalued.

NeroTree Capital rates Deutsche Bank AG as a BUY with a price target of $19.50.
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