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Goldman Sachs Downgrades Deutsche Bank to Neutral, Commerzbank to Sell
ByAinvest
Tuesday, Aug 26, 2025 4:55 pm ET1min read
Goldman Sachs downgraded Deutsche Bank to Neutral from Buy and Commerzbank to Sell from Neutral, citing changes in valuation after their stocks outperformed year-to-date. The firm attributed the downgrades to better growth, a steeper rates backdrop, and consistent beats and improvements in profitability.
Goldman Sachs has downgraded Deutsche Bank (NYSE:DB) to Neutral from Buy and Commerzbank (OTCPK:CRZBF) (OTCPK:CRZBY) to Sell from Neutral, reflecting changes in valuation following their stocks' strong year-to-date performance. The analyst Chris Hallam cited better growth, a steeper rates backdrop, and consistent improvements in profitability as the reasons for the downgrades [1].Hallam noted that European banks have outperformed broader European equities, driven by factors such as improved growth prospects and a more favorable interest rate environment. Despite the downgrades, Hallam remains constructive about the outlook for European banks, predicting an average 10% upside to Goldman's updated 12-month price targets and a 20% upside for several Buy-rated names [1].
UniCredit's strategic build-up of a 26% stake in Commerzbank, valued at €10.7 billion, aims to leverage Commerzbank's robust SME lending network. However, this move faces political resistance and regulatory scrutiny, with Germany's 12.1% ownership and the July 2025 antitrust review as critical hurdles [2].
Investors should closely monitor the July 2025 antitrust review, UniCredit's CET1 ratio, and Commerzbank's EBITDA growth to assess the long-term viability of the consolidation [2]. The potential merger could create a €1.5 trillion banking giant, but faces risks from regulatory delays and market fragmentation [3].
References:
1. [1] https://seekingalpha.com/news/4489329-deutsche-bank-cut-to-neutral-commerzbank-cut-to-sell-at-goldman
2. [2] https://www.ainvest.com/news/unicredit-strategic-build-commerzbank-path-dominance-european-banking-2508/
3. [3] https://www.ainvest.com/news/high-stakes-game-european-banking-consolidation-unicredit-pursuit-commerzbank-strategic-implications-2508/
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