Bank Stock Soars on Preliminary Profit Beat

The bank did warn against a lower-than-expected CET1 for its first-quarter

Deputy Editor
Apr 27, 2020 at 10:38 AM
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The shares of financial name Deutsche Bank AG (NYSE:DB) are surging this morning, up 10.8% at $6.59, after the company announced on Sunday its preliminary first-quarter report. The German-based bank said it expected a quarterly net income of 66 million euros, or $71.42 million, on revenue of 6.4 billion euros, or $6.94 billion, blowing analyst estimates out of the water. Deutsche Bank did add, however, that its common equity tier 1 (CET1) ratio fell to 12.8% in the first quarter, down from 13.6% at the end of last year, warning that it may present a lower CET1 ratio below its target of 12.5% going forward. 

The pop puts DB back above its 20-day moving average -- a trendline the stock has danced around for the past month as it continues to trade sideways. Support at the equity's $6 region has kept it from plummeting back towards its mid-March lows, though. Now, DB is contending with its descending 40-day moving average, which it hasn't closed north of since late-February.

Sentiment surrounding DB is lukewarm at best. Of the four covering the security, three say "hold," while one says "sell." Plus, the consensus 12-month price target of $5.62 is a 13.8% discount to current levels. 

Meanwhile, options bulls seem to be coming around to Deutsche Bank, though puts are still outnumbering calls on an overall basis. This is per DB's 50-day call/put volume ratio of 0.41 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 72% of readings from the past year. 

 

 

 

 

 

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