Deutsche Bank (DB) Down 1.9% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Deutsche Bank (DB). Shares have lost about 1.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Deutsche Bank due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Deutsche Bank Q3 Earnings Rise Y/Y, Provisions & Costs IncreaseDeutsche Bank reported third-quarter 2024 earnings attributable to its shareholders of €1.5 billion ($1.6 billion), up 41.7% year over year.The Germany-based lender reported a profit before tax of €2.3 billion ($2.4 billion), up 31.2% year over year. Third-quarter profit growth was driven by approximately €440 million ($474.4 million) partial release of Postbank-related litigation provisions.Excluding Postbank-related litigation release, profit before tax of €1.8 billion ($1.9 billion) increased 6% year over year.Results were positively impacted by solid growth in Investment Bank revenues and the partial release of Postbank-related litigation provisions. However, the company has increased its provision of credit loss forecast for 2024.Deutsche Bank’s Revenues & ExpensesThe bank generated net revenues of €7.5 billion ($8.1 billion), up 5% year over year. This upside was primarily driven by strong growth in commissions and fee income and broadly stable net interest income.Non-interest expenses of €4.7 billion ($5.1 billion) declined 8% from the prior-year quarter. Provision for credit losses was €494 million ($474.9 million), significantly up from €245 million ($264.1 million) in the prior-year quarter.Deutsche Bank’s Segmental PerformanceCorporate Bank: Net revenues for the segment were €1.8 billion ($1.9 billion), down 3% year over year. The results were hurt by lower net interest income, a decline in loan net interest income, and a decrease in Corporate Treasury Services and Business Banking revenues.Investment Bank: This segment’s net revenues totaled €2.5 billion ($2.7 billion), up 11% year over year. The upside was primarily driven by growth across Fixed Income and Currencies, and Origination & Advisory.Private Bank: Net revenues of €2.3 billion ($2.5 billion) were essentially flat year over year. This reflects an increase in Wealth Management & Private Banking revenues, and lower revenues in Personal Banking.Asset Management: Net revenues of €660 million ($711.5 million) rose 11% year over year. An increase in management fees led to the rise.Corporate & Other: The segment reported net revenues of €157 million ($169.2 million), up from €35 million ($37.7 million) a year ago.Deutsche Bank’s Capital PositionDB’s Common Equity Tier 1 capital ratio was 13.8% as of Sept. 30, 2024, down from the year-ago quarter’s 13.9%.The leverage ratio on a fully loaded basis was 4.6%, down from the year-ago quarter's 4.7%.Outlook2024Deutsche Bank’s revenue trajectory is on track to meet the €30 billion targets for 2024, supported by momentum in all businesses. This compares to revenues of €31.2 billion reported in 2023.Provision for credit losses is projected to be €1.8 billion, up from the €1.5 billion reported in 2023. Financial Targets for 2025Revenues are anticipated to witness a CAGR of 5.5-6.5% from 2021 to 2025.Management expects total costs to be €20 billion.Deutsche Bank has an RWA optimization target of €25-€30 billion.Provisions are expected to normalize towards €350 million per quarter by 2025, reflecting improved CRE market conditions and the resolution of transitional Postbank integration effects.Post-tax Return on Average Tangible Equity is expected to be above 10%.Management expects cost/income ratio to be less than 62.5%.CET1 capital ratio is anticipated to be approximately 13%.Total payout ratio is expected to be 50% from 2025.How Have Estimates Been Moving Since Then?Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.VGM ScoresAt this time, Deutsche Bank has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookDeutsche Bank has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Deutsche Bank Aktiengesellschaft (DB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks