Deutsche Bank Aktiengesellschaft (ETR:DBK) received a lot of attention from a substantial price increase on the XTRA over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Deutsche Bank’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Deutsche Bank
Is Deutsche Bank still cheap?
The stock is currently trading at €9.52 on the share market, which means it is overvalued by 36% compared to my intrinsic value of €6.99. This means that the opportunity to buy Deutsche Bank at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Deutsche Bank’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Deutsche Bank look like?
XTRA:DBK Past and Future Earnings, February 24th 2020
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 91% over the next year, the near-term future seems bright for Deutsche Bank. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in DBK’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe DBK should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on DBK for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for DBK, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Deutsche Bank. You can find everything you need to know about Deutsche Bank in the latest infographic research report. If you are no longer interested in Deutsche Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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