NEW YORK (
) 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
industry. Shares are down 2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff