1. Trading Idea - Long Deutsche Bank
Tuesday, October 2nd 2012
Company Description Investment Case
Last month, Deutsche Bank held its investor day. The Management
announced some aggressive financial targets, well above existing
consensus estimates.
Market Price Data Deutsche Bank will continue strengthening capital ratios. The bank
52-week High (€) 39.51 has identified non-core RWAs. Non-core assets will be sold. This is
52-week Low (€) 22.11 positive, but we’ll need to see exit costs. Some strong cost measures
Last Price (€) 32.075 are expected to be implemented. But the consensus is cautious. It is
YTD Change 8.97% considering only a small part of the company´s targeted cost saves.
Mkt Cap (€bn) 29.8137
Transaction banking, retail banking and asset management should
Float 96.1%
progressively become the bank’s biggest drivers. The company is
Source: Bloomberg
targeting for higher profits from its non-Investment Banking
activities.
Analysts Recommendations:
The stock has rebounded from its lows. ECB’s more aggressive stance
has supported a higher allocation to risk, and to the European
banking sector.
We acknowledge the bank’s challenges, the transformational nature
of its business plan and its high total asset leverage. But, for now, in
Source: Bloomberg
the current environment, the last investor day could have been what
Market Multiples was needed to allow the upward movement to go on.
P/B 2013 ROE 2013 DY 2013
We define as a stop loss €29.79. We´ll close our trading idea at
Est. Est. Est.
€36.47.
Deutsche Bank 0.50 7.41% 2.39%
UBS 0.76 9.28% 3.43%
Credit Suisse 0.73 9.93% 3.84% Technical Comment
Source: Bloomberg
H2 2012 Report
Summary (in € m.) H1 2012 H1 2011
Total net revenues 17,214 19,014
Prov. for credit losses 733 837
Net Income 2,063
Core Tier 1 cap. ratio 10.2% 9.5%
ROE (Post Taxes) 7.4% 13.1%
Source: DB´s interim Report Q2 2012
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