We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deutsche Bank Shows Capital Strength, Legal Costs a Drag
Read MoreHide Full Article
On Nov 6, we issued an updated research report on Deutsche Bank AG (DB - Free Report) . Its initiatives to improve performance through expense management and strengthening capital position will likely lend support to the stock. However, persistent margin pressure and high legal costs might offset the positives to some extent.
Shares of Deutsche Bank have gained 18.2% over the past year, underperforming the 23.1% rally for the industry.
The company’s Zacks Consensus Estimate for the current year has remained stable over the past 30 days. As a result, it currently carries a Zacks Rank #3 (Hold).
The bank has taken steps to reduce expenses, which was reflected in its results over the past few quarters. Management expects to continue controlling overall expenses despite increasing legal costs.
Deutsche Bank remains committed to improve its capital position and targets achieving Common Equity Tier 1 ratio of above 13% and Leverage ratio of minimum 4.5% at the end of 2018. Also, the recent stress test conducted by The European Banking Authority revealed the bank’s progress in its risk profile and capital position.
Deutsche Bank has significant involvement in legal matters, of which some have been settled. However, this is likely to keep expenses on the higher side in the near term. Further, in order to settle a pending case over manipulation of the U.S. dollar, LIBOR (the London Interbank Offered Rate) and other benchmark interest rates, it signed a $220 million agreement with the authorities. Also, in January 2017, it paid $7.2 billion as fine over its sale of toxic mortgage securities. These legal settlements have made a significant impact on its financials.
Moreover, Deutsche Bank continues to face margin pressure due to a low interest rate environment in the European economy.
Stocks to Consider
The Goldman Sachs Group (GS - Free Report) witnessed an upward earnings estimate revision of 4.3% for the current year, in the last 30 days. Its share price has increased 8.2% in the past six months. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BlackRock (BLK - Free Report) carries a Zacks Rank of 2. For the current year, in the last 30 days, its Zacks Consensus Estimate was revised 1.1% upward. The company’s share price has increased 24.4% in the past six months.
Ameriprise Financial (AMP - Free Report) has a Zacks Rank of 2. The company witnessed upward earnings estimate revision of 5.9% for the current year, in the last 30 days. Its share price has increased 25.1% in the past six months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
Deutsche Bank Shows Capital Strength, Legal Costs a Drag
On Nov 6, we issued an updated research report on Deutsche Bank AG (DB - Free Report) . Its initiatives to improve performance through expense management and strengthening capital position will likely lend support to the stock. However, persistent margin pressure and high legal costs might offset the positives to some extent.
Shares of Deutsche Bank have gained 18.2% over the past year, underperforming the 23.1% rally for the industry.
The company’s Zacks Consensus Estimate for the current year has remained stable over the past 30 days. As a result, it currently carries a Zacks Rank #3 (Hold).
The bank has taken steps to reduce expenses, which was reflected in its results over the past few quarters. Management expects to continue controlling overall expenses despite increasing legal costs.
Deutsche Bank remains committed to improve its capital position and targets achieving Common Equity Tier 1 ratio of above 13% and Leverage ratio of minimum 4.5% at the end of 2018. Also, the recent stress test conducted by The European Banking Authority revealed the bank’s progress in its risk profile and capital position.
Deutsche Bank has significant involvement in legal matters, of which some have been settled. However, this is likely to keep expenses on the higher side in the near term. Further, in order to settle a pending case over manipulation of the U.S. dollar, LIBOR (the London Interbank Offered Rate) and other benchmark interest rates, it signed a $220 million agreement with the authorities. Also, in January 2017, it paid $7.2 billion as fine over its sale of toxic mortgage securities. These legal settlements have made a significant impact on its financials.
Moreover, Deutsche Bank continues to face margin pressure due to a low interest rate environment in the European economy.
Stocks to Consider
The Goldman Sachs Group (GS - Free Report) witnessed an upward earnings estimate revision of 4.3% for the current year, in the last 30 days. Its share price has increased 8.2% in the past six months. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BlackRock (BLK - Free Report) carries a Zacks Rank of 2. For the current year, in the last 30 days, its Zacks Consensus Estimate was revised 1.1% upward. The company’s share price has increased 24.4% in the past six months.
Ameriprise Financial (AMP - Free Report) has a Zacks Rank of 2. The company witnessed upward earnings estimate revision of 5.9% for the current year, in the last 30 days. Its share price has increased 25.1% in the past six months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>