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When Can We Expect A Profit From Deutsche Bank Aktiengesellschaft (FRA:DBK)?

Micheal Lombardo

Deutsche Bank Aktiengesellschaft’s (DB:DBK): Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services to private individuals, corporate entities, and institutional clients worldwide. With the latest financial year loss of -€1.05B and a trailing-twelve month of -€1.50B, the €19.76B market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which DBK will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for DBK.

Check out our latest analysis for Deutsche Bank

DBK is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2017, before turning a profit of €986.58M in 2018. Therefore, DBK is expected to breakeven roughly a couple of months from now! What rate will DBK have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 36.66%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

DB:DBK Past Future Earnings Jun 11th 18

Underlying developments driving DBK’s growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one issue worth mentioning. DBK currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and DBK has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of DBK to cover in one brief article, but the key fundamentals for the company can all be found in one place – DBK’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:

  1. Valuation: What is DBK worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DBK is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Deutsche Bank’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.