Deutsche Bank has declined by 71.4% to around $9.56 a share in the five and a half years since our quantitative model downgraded the stock to sell from hold on April 18, 2013.
Quant Ratings evaluates thousands of stocks on a daily basis using a quantitative model that combines fundamental analysis of a firm's latest financial statements with technical analysis of a stock's price moves. You can check out Quant Ratings here.
Below is an excerpt from Quant Ratings' latest analysis of Deutsche Bank:
We rate Deutsche Bank AG as a sell with a ratings score of D. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Quant Ratings goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 69.8% when compared to the same quarter one year ago, falling from $804.04 million to $242.83 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, Deutsche Bank AG's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: It has tumbled by 50.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 70.27% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- DB, with its decline in revenue, underperformed when compared the industry average of 3.4%. Since the same quarter one year prior, revenues fell by 16.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Deutsche Bank AG has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 continued to lose money by earning -50 cents vs. -$1.28 in the prior year. This year, the market expects an improvement in earnings (40 cents vs. -50 cents).
- You can view the full analysis from the report here: DB
Editor's Note: Any reference to TheStreet Quant Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet, Inc. or any of its contributors.