Back to top

Image: Bigstock

Deutsche Bank's (DB) Outlook Upgraded to Positive by S&P

Read MoreHide Full Article

Deutsche Bank’s (DB - Free Report) credit rating outlook has been raised to positive from negative by S&P Global Ratings, a division of S&P Global Inc. (SPGI - Free Report) . The news was first reported by Reuters.

"Our positive outlook acknowledges the huge progress made and the bank's likely resilience to the current adverse economic conditions," S&P stated. However, Deutsche Bank still has a rating of BBB+, which remains below many of its competitors.

Per the article, S&P’s rating decision follows favorable outlooks from peers including Moody’s Corporation (MCO - Free Report) and Fitch Ratings. Notably, the lender’s efforts to undertake a major overhaul is a vital factor for the outlook upgrade.

In October 2020, ratings of Deutsche Bank were affirmed by Moody's. Notably, outlook of the company was upgraded from negative to stable on account of A3 long-term deposit and senior unsecured debt ratings. The ratings agency is of the opinion that the company’s plans to focus more on capital market operations are expected to make the journey to achieving a more balanced and sustainable business model quicker.

Also, in January 2021, Fitch Ratings revised its outlook to positive from negative. The agency reasoned that the bank's progress in restructuring moves, including maintaining the cost discipline, remains impressive.

Deutsche Bank rolled out restructuring moves even before the pandemic outbreak. In a bid to improve long-term profitability, last July, the bank announced a number of major restructuring plans and fresh set of targets that it seeks to achieve by 2022 without raising additional capital.

Though the bank’s restructuring efforts — including cost-saving measures — look encouraging, it is difficult to determine how much it would gain from the same, considering the prevalent headwinds.

The stock has gained 29.9% on the NYSE in the past six months compared with the industry’s growth of 31.3%.

Deutsche Bank currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Another stock in the same space worth considering is Barclays PLC (BCS - Free Report) , carrying a Zacks Rank of 2. The company has been witnessing upward estimate revision for the current year over the past 30 days. Also, its shares have gained 51% over the past six months.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>

Published in