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On Wednesday, UBS analysts downgraded Deutsche Boerse (ETR:DB1Gn) AG stock from Buy to Neutral. The decision comes as the stock has surged 55% since August 2024, driven by consensus earnings per share (EPS) upgrades and multiple expansion.
The analysts at UBS also adjusted the price target for Deutsche Boerse AG to €309 from the previous target of €320. They noted that the company’s shares are currently trading at a forward price-to-earnings ratio of 27 times, excluding Net Treasury Income, which is more than two turns higher than its previous peak in mid-2020.
UBS highlighted that while there is potential value in holding Deutsche Boerse AG in a long-only portfolio due to its positive gearing to volatility, the outlook for further EPS upgrades and multiple expansion appears limited. The analysts expressed that the risk-reward profile of the stock has shifted from attractive to balanced.
In their comments, UBS analysts mentioned, "DB1 shares are +55% since Aug-24, driven by: 1) consensus EPS upgrades, and 2) multiple expansion, but we think the outlook for both of these catalysts is muted going forward."
The downgrade reflects UBS’s view that the current market conditions and valuation levels present a more balanced investment case for Deutsche Boerse AG moving forward.
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