Citi upgrades this financial giant, sees sharp gains ahead after banking crisis
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It’s time to buy Deutsche Bank shares as the beaten-down bank shows signs of a strong recovery, according to Citi. Analyst Andrew Coombs upgraded Deutsche Bank to buy/high risk from neutral/high risk, saying the stock has further upside after the firm’s stronger-than-expected first quarter results . “Deutsche Bank is one of the most de-rated banks YTD, yet the 1Q23 results demonstrated potential for further consensus earnings upgrades. In addition the company provided additional reassurance on the funding & liquidity position of the bank and on US CRE exposure,” Coombs wrote. “We believe the company can hit the top-end of the c€28-29bn revenue guidance for 2023 and will return to (small) buybacks with the interim results,” Coombs added. DB 1D mountain Deutsche Bank shares 1-day Deutsche Bank last week reported a first-quarter net profit of 1.158 billion euros, or around $1.28 billion. It was the German bank’s 11th straight quarterly profit after completing a restructuring plan that started in 2019. It also marked the company’s first quarterly report since a banking crisis in Europe that ended with Credit Suisse being absorbed by rival UBS. The bank’s German-listed stock is down 10% this year. However, the analyst’s €13.50 price target represents 40% upside from Tuesday’s price at €9.63. The analyst cited Deutsche Bank’s better-than-expected first-quarter revenue results on the back of strong corporate and private bank results, and said it will likely beat guidance again. “We expect both divisions to surpass guidance (of “well above” €7bn and €9bn respectively), even as we assume deposit betas trend higher to 35%, and are broadly consistent with guidance on the investment bank and asset management (of ~€9bn and ~€2.5bn),” he wrote. “Consequently we forecast FY23 revenues of€29.1bn, slightly above guidance €28-29bn and consensus €28.2bn,” he added. —CNBC’s Michael Bloom contributed to this report.
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