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Deutsche Bank is slated to release its Q4 and full-year 2019 results on January 30, 2020. For FY 2019, Trefis estimates that the company will report:
Revenues would have decreased 5% year-on-year to €24 billion (ahead of the consensus estimate of €23 billion), primarily due to a steep decline in trading revenues as well as advisory and underwriting revenues. Moreover, we expect the bank’s EPS to be negative €0.29 (-$0.32) mainly due to impairment and goodwill charges incurred as a part of the restructuring plan undertaken by the management. However, our EPS estimate is higher than the consensus estimate of -$0.90.
Although our estimates are higher than consensus numbers, we believe that the reorganization of the bank would take time and estimate Deutsche Bank’s valuation to be $7 a share, which is roughly 20% behind the current market price.
(1) Revenues expected to be higher than the consensus estimates
Trefis estimates Deutsche Bank's's 2019 revenues to be €24 billion, higher than the consensus estimate of €23 billion
Total net revenue
(1) Private Banking €10.0 Bil (42%)
(2) Sales & Trading €5.5 Bil (23%)
(3) Global Transaction €4.1 Bil (17%)
(4) Asset Management €2.4 Bil (10%)
(5) Advisory €1.7 Bil (7%)
(6) Non-core & other €0.4 Bil (1%)
TOTAL €24.0 Bil
Consensus €23.0 Bil
Surprise €1.0 Bil
(2) EPS likely to beat consensus estimates
Deutsche Bank's 2019 earnings per share (EPS) expected to be -$0.32 per Trefis analysis, significantly higher than the consensus estimate of -$0.90 per share
Total Revenues €24.0 Bil
- Total Expenses €24.6 Bil(*)
Net Income -(€0.6) Bil(**)
÷ Shares Outstanding 2.1 Bil
EPS(***) - $0.32
Consensus - $0.90
(*) - The expense figure includes preferred dividend and other minority expenses
(**) - Numbers don't add up due to rounding
(***) - Adjusted for exchange rate
Detail about our forecast for Deutsche Bank's (1) Revenues, (2) EPS, and (3) P/E Multiple follow:
Trefis estimates Deutsche Bank’s 2019 revenues to be
€24 billion, above the consensus estimate of
€23 billion.Deutsche Bank’s total revenue has seen sizable headwinds since 2015 and has shrunk from €33.5 billion to around €25.3 billion in 2018.FY 2019 was a year of transition for Deutsche Bank, with the bank announcing its largest restructuring plan to date. The plan would have weighed on the bank’s top and bottom-line.The bank’s revenue would have declined due to a steep fall in the bank’s sales & trading revenues while advisory and underwriting revenues are also likely to have tumbled due to a global decline in the debt and equity underwriting deal volumes.Although the bank’s asset management business would have seen a steady growth due to a rise in the assets under management.
What about Revenues in 2020?
See Deutsche Bank Revenue - How Does DB Make Money?
We provide an interactive, in-depth view of the company's revenues along with our forecasts and a comparison of trends with peers UBS, Barclays and Credit Suisse.
For FY 2020, we expect Deutsche Bank’s revenue to fall by 1%, losing well over €220 million in total revenues likely to be driven by a y-o-y decline in sales & trading revenues coupled with the macroeconomic uncertainty which is expected to continue to adversely impact the bank’s revenues.
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What about Expenses and Earnings in 2020?
For 2020, we believe that stable revenues coupled with a steady decline in expenses will result in the adjusted net income margin expanding to more than 3%.
(3) A trailing P/S multiple of 0.5x looks appropriate for Deutsche Bank's stock, which is lower than the current implied P/S multiple of 0.7x
We use our full cash flow model for Deutsche Bank to arrive at a P/E multiple of 0.53x for a price estimate of $7
Note: P/S Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year
Deutsche Bank P/S Ratio
UBS P/S Ratio
Credit Suisse P/S Ratio
1. How to save your forecasts for DB:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
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