Deutsche Bank AG: Promising Growth and Strategic Initiatives Justify Buy Rating

Deutsche Bank AG (DB) has received a new Buy rating, initiated by Bank of America Securities analyst, Tarik El Mejjad.

Tarik El Mejjad’s rating is based on a combination of factors that highlight Deutsche Bank AG’s promising outlook. The bank is expected to benefit significantly from Germany’s transformative fiscal policies, which are projected to boost the country’s GDP by 1.5-1.8% in the latter half of 2026. This fiscal expansion, along with Deutsche Bank’s strong position in the corporate and investment banking sectors, is anticipated to drive revenue growth above 4% CAGR. The bank’s strategic initiatives, including cost control and capital return strategies, are expected to enhance its return on tangible equity (ROTE) to approximately 12% by 2028.
Deutsche Bank’s ability to maintain a high CET1 ratio is seen as a positive factor for its funding costs and credit ratings. The bank plans to return over €15 billion in capital through dividends and share buybacks over the next four years, which is significant given its current valuation discount. Additionally, the bank has addressed many of its past challenges, such as reducing investment banking volatility and resolving litigation issues, which lowers its risk profile and supports a lower cost of equity. These elements combined make Deutsche Bank an attractive investment, justifying the Buy rating.

El Mejjad covers the Financial sector, focusing on stocks such as Deutsche Bank AG, ABN AMRO Group N.V., and ING GROEP. According to TipRanks, El Mejjad has an average return of 10.0% and a 77.78% success rate on recommended stocks.

In another report released on June 5, RBC Capital also maintained a Buy rating on the stock with a €25.00 price target.