Jim Lebenthal Is Avoiding Deutsche Bank (DB) Despite Afternoon Rally - TheStreet

NEW YORK (TheStreet) -- Shares of Deutsche Bank (DB) - Get Report are soaring by 12.46% to $12.91 on Friday afternoon, after AFP reported that the embattled German bank is nearing a settlement with the U.S. Department of Justice over a fine for selling mortgage-backed securities, during the mid-2000's housing bubble.

AFP, citing an anonymous source, claims that the settlement is only $5.4 billion. Investors had speculated that the size of the fine could near $14 billion, which could have left Deutsche Bank needing to raise capital by issuing equity or asking the German government for help.

Despite the rally, Lebenthal Asset Management CEO Jim Lebenthal is staying far away from the stock.

"This reminds me way too much of the exact stock chart for Lehman Brothers and Bear Stearns in the spring of 2008. It kept going down. Were there bounces up like today's for those two names? Of course there were," he said on CNBC's "Halftime Report" Friday. "I'm not suggesting it's 2008 all over again. What I am suggesting is that Deutsche Bank the stock, is not something you should be playing with right now and there probably will be some repercussions. Not fatal. Not '08 for the rest of the finance sector."

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate DEUTSCHE BANK AG as a Sell with a ratings score of D. This is driven by multiple 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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

You can view the full analysis from the report here: DB

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