TheStreet Ratings Top 10 Rating Changes

Rating Change #1

Deutsche Bank AG (DB) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and weak operating cash flow.

Highlights from the ratings report include:

• DEUTSCHE BANK AG's earnings per share declined by 36.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DEUTSCHE BANK AG increased its bottom line by earning $5.55 versus $4.25 in the prior year. This year, the market expects an improvement in earnings ($6.59 versus $5.55).
• Regardless of the drop in revenue, the company managed to outperform against the industry average of 22.8%. Since the same quarter one year prior, revenues fell by 14.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• The debt-to-equity ratio is very high at 5.41 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 37.0% when compared to the same quarter one year ago, falling from $2,924.54 million to $1,841.43 million.

Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services. The company has a P/E ratio of 6.7, below the average banking industry P/E ratio of 7.7 and below the S&P 500 P/E ratio of 17.7. Deutsche has a market cap of $34.32 billion and is part of the financial sector and banking industry. Shares are down 2% year to date as of the close of trading on Wednesday.

You can view the full Deutsche Ratings Report or get investment ideas from our investment research center.

-- Reported by Kevin Baker in Jupiter, Fla.



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For all other upgrades and downgrades made by TheStreet Ratings Model today check out our upgrades and downgrades list.

Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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