Deutsche Bank Shares Hit Record Low as UBS Downgrades Stock to ‘Sell’

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  • Pointing to tough external events and low rate environment, UBS slashed its price target for Deutsche from 7.80 euros ($7.45) to 5.70 euros.
  • Deutsche faces pressure from investors to trim its investment bank division, especially after the collapse of merger talks with Commerzbank.
  • Shares of Deutsche Bank are down nearly 5% since the start of this year.

Shares of Deutsche Bank hit a record low Monday, down nearly 3%, after UBS downgraded the German lender’s stock to a “sell” rating from “neutral.”

Pointing to tough external events and the low interest rate environment, UBS slashed its price target for Deutsche from 7.80 euros ($7.45) to 5.70 euros.

“We downgrade to sell because we don’t expect operating conditions to improve anytime soon. Deutsche remains a levered market play vulnerable to external events and rising rates are currently a distant hope,” UBS analysts said in a research note on Monday.

Rising rates are good for banks since they are able to lend out money with a profitable rate of interest. Lower interest rates can restrict a bank’s ability to make profits, adding pressure on margins.

The German bank saw its stock hit to a record low of 6.673 euros on Monday morning, just days before its annual general meeting.

www.cnbc.com/2019/05/20/deutsche-bank-shares-hit-record-low-as-ubs-downgrades-stock-to-sell.html?__source=twitter%7Cmain

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