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Investing.com -- Commerzbank shares were downgraded to “hold” from “buy” on valuation grounds after a rally that saw the stock triple over the past year, according to a note from Deutsche Bank.
The target price was raised to €35 from €33, while the stock last closed at EUR37.30. Analyst Benjamin Goy said the downgrade reflects the bank’s current premium relative to peers.
Commerzbank now trades at a 20% to 42% price-to-earnings premium compared with the sector, even against forecasts above market consensus. The stock has been rated “buy” for more than three and a half years.
Goy noted that the fundamentals remain intact, pointing to profitability improvements, capital returns, and expected benefits from Germany’s fiscal stimulus.
He also flagged the role of structural buyers in the stock, including Germany baskets and derivatives conversion, with buybacks expected to add further demand.
On updated 2027 forecasts, Commerzbank is trading at 10 times earnings per share, 1.3 times tangible book value, and a 10% total yield for a return on tangible equity of 13.5%.