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On Wednesday, Citi analyst Andrew Coombs revised the price target for Deutsche Boerse (ETR:DB1Gn) AG (DB1:GR) (OTC:DBOEY) upward to €269.00, a significant increase from the previous target of €242.00. Despite the raised target, the firm’s stance on the stock remains Neutral.
Coombs noted that the company’s first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to be 2% higher than the consensus, with revenues anticipated to be 1% above expectations. This improvement is attributed to stronger performance in Fund Services and Securities Services, matched with on-target operating expenses. Citi anticipates that Deutsche Boerse will reaffirm its existing guidance for the years 2025 and 2026 during the upcoming earnings call. However, given the company’s current trajectory, the expectation is that the full-year 2025 guidance may see an upward revision when second-quarter 2025 results are released.
The report acknowledges the cyclical nature of Deutsche Boerse’s business. While the company is currently benefiting from robust trading volumes and a favorable interest rate environment, which has supported its year-to-date share price performance, there is concern about the sustainability of this momentum. Citi’s analysis suggests that if these supportive conditions begin to wane over the years 2025 and 2026, the company’s performance could potentially slow down and reverse.
Additionally, Coombs pointed out that Deutsche Boerse is currently trading at 22 times its projected 2026 earnings per share, which is considered expensive when compared to its historical price-to-earnings range of 16 to 24 times and to its United States peers. This valuation implies that the stock’s current price may be on the higher end of its traditional market valuation.
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