Dan Kitwood
Deutsche Bank (NYSE:DB) continues to trade at a discounted valuation that doesn’t seem to be warranted, but needs to execute its strategy and show the market that is sustainable profitability is now much higher than it was in the
Why Is Deutsche Bank Valuation So Cheap?
Summary
- Deutsche Bank has clearly improved its fundamentals and profitability in recent years, but its valuation remains depressed.
- Its sustainable ROE should be between 6-8% over the next few years, which justifies a higher P/BV multiple.
- The bank needs to increase investors’ confidence in its business prospects to support a re-rating of its shares.
Labutes IR is a Fund Manager/Analyst specialized in the financial sector, with more than 18 years of experience in the financial markets. I have worked at several type of institutions in the industry, always at the buy side and related to portfolio management. Associated with the existing author The Outsider.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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