Treasury Secretary Bessent announces tariff relief on coffee, fruits
Investing.com -- Deutsche Pfandbriefbank shares dropped 5.5% after Kepler downgraded the stock from Hold to Reduce and cut its price target from EUR5.3 to EUR4.0, reflecting a more conservative valuation approach.
The downgrade comes ahead of the bank’s third quarter results, scheduled for release on November 13. Kepler has lowered its third quarter and 2025-27 earnings per share estimates by 5-6%, primarily due to higher projected funding costs and risk costs.
In its valuation model, Kepler is now applying a more stringent 14.75% CET1 ratio requirement, up from the previous 14.0%. This adjustment represents the mid-point between the bank’s through-the-cycle minimum requirement of 14% and its 2027 target of above 15.5%.
The outlook for shareholder returns appears challenging, according to analysts. "We expect no dividend payments for FY2025, making the stock relatively unattractive compared to its European bank peers, which offer up to double-digit total yields," Kepler noted in its report.
This pessimistic dividend forecast stands in contrast to many European banking peers that continue to offer attractive shareholder returns, further supporting the rationale behind the downgrade.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.