BUY HOLD SELL A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F Annual Dividend Rate SELL SELL RATING SINCE 04/18/2013 BUSINESS DESCRIPTION Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services to private individuals, affluent clients, and small and medium sized corporate clients worldwide. Sector: Financial Services Sub-Industry: Diversified Capital Markets Source: S&P Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years 25 23 20 STOCK PERFORMANCE (%) 3 Mo. 1 Yr. 3 Yr (Ann) Price Change 17.80 41.48-11.87 GROWTH (%) Last Qtr 12 Mo. 3 Yr CAGR Revenues -3.17-1.65-7.24 Net Income 174.91 96.15 NA EPS 85.00 63.47 NA Rating History SELL 18 15 13 10 RETURN ON EQUITY (%) Ind Avg S&P 500 Q3 2017-0.07 22.83 13.41 Q3 2016-2.15 32.94 11.79 Q3 2015-6.20 11.20 12.91 P/E COMPARISON Volume in Millions 2016 2017 COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History RECOMMENDATION We rate () a SELL. This is driven by multiple nesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been operating cash flow. 200 100 0 n/m EPS ANALYSIS¹ ($) 25.42 Ind Avg 25.45 S&P 500 HIGHLIGHTS Net operating cash flow has declined marginally to -$24,262.03 million or 6.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, 's return on equity significantly trails that of both the industry average and the S&P 500. Q1 0.42 Q2 0.64 Q3-4.84 2015 Q4-1.73 Q1 0.17 Q2-0.20 Q3 0.20 2016 NA = not available NM = not meaningful Q4-1.45 Q1 0.41 Q2 0.10 Q3 0.37 2017 1 Compustat fiscal year convention is used for all fundamental data items., with its decline in revenue, underperformed when compared the industry average of 17.5%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. The gross profit margin for is currently very high, coming in at 71.59%. It has increased from the same quarter the previous year. Despite the results of the gross profit margin, 's net profit margin of 6.90% significantly trails the industry average. This stock has increased by 41.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months. PAGE 1
PEER GROUP ANALYSIS REVENUE GROWTH AND EBITDA MARGIN* Revenue Growth (TTM) -5% 12.5% UNFAVORABLE COHN JMP 10% DHIL UBS CS EBITDA Margin (TTM) AMTD BLK AMG BK FAVORABLE AB 100% Companies with higher EBITDA margins and revenue growth rates are outperforming companies with lower EBITDA margins and revenue growth rates. Companies for this scatter plot have a market capitalization between $9.6 Million and $80.4 Billion. Companies with NA or NM values do not appear. *EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization. REVENUE GROWTH AND EARNINGS YIELD Revenue Growth (TTM) -5% 12.5% UNFAVORABLE JMP -12.5% Earnings Yield (TTM) CS AMG AMTD FAVORABLE BLK COHN DHIL BK AB UBS 10% Companies that exhibit both a high earnings yield and high revenue growth are generally more attractive than companies with low revenue growth and low earnings yield. Companies for this scatter plot have revenue growth rates between -4.9% and 10.5%. Companies with NA or NM values do not appear. INDUSTRY ANALYSIS The US capital markets industry includes securities brokerage, investment banking, advisory services, asset management, and custody firms. The industry is subject to federal, state, and international regulations, which are intended to protect investors. The industry is sensitive to interest rate changes, stock market performance, and economic fluctuations. Major asset management and custody banks include Bank of New York Mellon (BK), State Street (STT), BlackRock (BLK), and Franklin Resources (BEN). Goldman Sachs (GS), Morgan Stanley (MS), and Charles Schwab (SCHW) are major players in investment banking and brokerage. The investment management business is mature, highly competitive, and marked by intense competition due to increasing demand from customers for investment advice and custom investment vehicles. Registered investment advisors managed assets worth in excess of $13 trillion. Key demand drivers are primary debt and equity offerings and the volume of mergers and acquisitions activity across sectors. Consolidation is on the rise as companies seek protection from competition. The brokerage sub-industry provides investment advice and brokerage of stocks, fixed-maturity securities, derivatives, and mutual funds to institutional investors and individuals. The sub-industry is concentrated and characterized by consolidation activity. Hefty returns over the past decade have encouraged investors to actively trade, which in turn, drives demand for brokerage activities and consulting services. Nearly 10,000 domestic firms, with annual revenue of $15 billion, provide financial planning and advisory services. This sub-industry is driven by consumer income and population growth. Approximately 60% of total revenue is generated from individual investors. Investor confidence has been crushed by recent disruptions in the capital and credit markets, stemming from a deteriorating housing market and the subprime meltdown. The capital markets industry has seen dramatic changes. Former industry leaders Lehman Brothers and Merrill Lynch have either filed for bankruptcy or sold out. Surviving investment banks, like Goldman Sachs and Morgan Stanley, have become bank holding companies to qualify for U.S. government assistance under the Troubled Asset Relief Program, or TARP. PEER GROUP: Capital Markets Recent Market Price/ Net Sales Net Income Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M) 18.86 38,969 NM 42,422.09-62.12 COHN COHEN & COMPANY INC 7.60 10 13.82 49.03 0.75 BLK BLACKROCK INC 501.19 80,357 23.46 11,912.00 3,517.00 DHIL DIAMOND HILL INVESTMENT GR 211.06 732 14.04 160.99 51.74 UBS UBS GROUP AG 17.18 66,150 16.36 35,971.89 4,002.62 BK BANK OF NEW YORK MELLON CO 54.74 56,635 16.01 16,408.00 3,785.00 CS CREDIT SUISSE GROUP 16.90 43,197 NM 30,331.03-1,393.64 AMTD TD AMERITRADE HOLDING CORP 51.17 29,010 31.20 3,676.00 872.00 AB ALLIANCEBERNSTEIN HOLDING LP 25.00 2,341 11.79 225.30 201.49 JMP JMP GROUP LLC 5.30 114 NM 158.14-13.72 AMG AFFILIATED MANAGERS GRP INC 198.67 11,042 21.50 2,251.30 524.40 The peer group comparison is based on Major Diversified Capital Markets companies of comparable size. PAGE 2
Annual Dividend Rate COMPANY DESCRIPTION Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services to private individuals, affluent clients, and small and medium sized corporate clients worldwide. The company's Global Markets segment offers financial markets' products, such as bonds, equities and equity-linked products, exchange-traded and over-the-counter derivatives, foreign exchange, money market instruments, and structured products. Its Corporate & Investment Banking segment provides commercial banking, mergers and acquisitions, debt and equity advisory and origination, and cash management services; trade finance services comprising international trade products and services, structured trade solutions, and technology; and securities services, including trust, payment, administration, and related services for selected securities and financial transactions, as well as domestic securities custody services. The company's Private, Wealth and Commercial Clients segment offers payment and current account services, investment and insurance products, deposits, and credit products; mid-cap related products; and customized wealth management solutions and private banking services consisting of discretionary portfolio management, and traditional and alternative investment solutions. Its Deutsche Asset Management segment invests in equities, fixed income, liquidity, real estate, infrastructure, private equity, and sustainable investments; and delivers alpha and beta solutions. The company's Postbank segment provides current and saving accounts, mortgage loans, building society contracts and consumer loans; corporate loans; international commercial real estate finance; payment transaction, factoring, and leasing services; interest rate and currency management services; and money market and capital market services. As of December 31, 2016, it operated 2,656 branches in 62 countries. The company was founded in 1870 and is headquartered in Frankfurt am Main, Germany. Taunusanlage 12 Frankfurt am Main 60325 DEU Phone: 49 69 910 00 Fax: 49 69 910 3859 http://www.db.com Employees: 100000 STOCK-AT-A-GLANCE Below is a summary of the major fundamental and technical factors we consider when determining our overall recommendation of shares. It is provided in order to give you a deeper understanding of our rating methodology as well as to paint a more complete picture of a stock's strengths and nesses. It is important to note, however, that these factors only tell part of the story. To gain an even more comprehensive understanding of our stance on the stock, these factors must be assessed in combination with the stock s valuation. Please refer to our Valuation section on page 5 for further information. FACTOR SCORE Growth 2.5 out of 5 stars Measures the growth of both the company's income statement and cash flow. On this factor, has a growth score better than 40% of the stocks we rate. Total Return 3.0 out of 5 stars Measures the historical price movement of the stock. The stock performance of this company has beaten 50% of the companies we cover. Efficiency 1.5 out of 5 stars Measures the strength and historic growth of a company's return on invested capital. The company has generated more income per dollar of capital than 20% of the companies we review. Price volatility 2.0 out of 5 stars Measures the volatility of the company's stock price historically. The stock is less volatile than 30% of the stocks we monitor. Solvency 0.5 out of 5 stars Measures the solvency of the company based on several ratios. The company is less solvent than nearly all of the companies we analyze. Income 3.5 out of 5 stars Measures dividend yield and payouts to shareholders. The company's dividend is higher than 60% of the companies we track. THESTREET RATINGS RESEARCH METHODOLOGY TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates. While our model is quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings. Objective elements include volatility of past operating revenues, financial strength, and company cash flows. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's performance. These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. PAGE 3
Consensus EPS Estimates² ($) IBES consensus estimates are provided by Thomson Financial FINANCIAL ANALYSIS 's gross profit margin for the third quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. During the same period, stockholders' equity ("net worth") has increased by 11.28% from the same quarter last year. 0.05 Q4 FY17 1.06 E 2017(E) 1.39 E 2018(E) STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.thestreetratings.com. INCOME STATEMENT Net Sales ($mil) 11,649.35 12,029.64 EBITDA ($mil) 4,217.08 4,418.25 EBIT ($mil) 4,217.08 4,418.25 Net Income ($mil) 804.04 292.47 BALANCE SHEET Cash & Equiv. ($mil) 341,797.34 232,280.47 Total Assets ($mil) 1,797,293.61 1,898,043.13 Total Debt ($mil) 289,450.40 294,833.43 Equity ($mil) 83,097.37 74,668.64 PROFITABILITY Gross Profit Margin 71.59% 69.49% EBITDA Margin 36.20% 36.72% Operating Margin 36.20% 36.73% Sales Turnover 0.02 0.02 Return on Assets 0.00% -0.08% Return on Equity -0.07% -2.15% DEBT Current Ratio NA NA Debt/Capital 0.78 0.80 Interest Expense NA NA Interest Coverage NA NA SHARE DATA Shares outstanding (mil) 2,094 1,379 Div / share 0.00 0.00 EPS 0.37 0.20 Book value / share 39.69 54.15 Institutional Own % NA NA Avg Daily Volume 4,119,624 3,847,930 2 Sum of quarterly figures may not match annual estimates due to use of median consensus estimates. PAGE 4
RATINGS HISTORY Our rating for has not changed since 4/18/2013. As of 11/30/2017, the stock was trading at a price of which is 3.2% below its 52-week high of $19.48 and 43.1% above its 52-week low of $13.18. 2 Year Chart SELL: $21.68 2016 $25 $20 $15 MOST RECENT RATINGS CHANGES Date Price Action From To 11/30/15 $21.68 No Change Sell Sell Price reflects the closing price as of the date listed, if available RATINGS DEFINITIONS & DISTRIBUTION OF THESTREET RATINGS (as of 11/30/2017) 44.19% Buy - We believe that this stock has the opportunity to appreciate and produce a total return of more than 10% over the next 12 months. 30.85% Hold - We do not believe this stock offers conclusive evidence to warrant the purchase or sale of shares at this time and that its likelihood of positive total return is roughly in balance with the risk of loss. 24.96% Sell - We believe that this stock is likely to decline by more than 10% over the next 12 months, with the risk involved too great to compensate for any possible returns. TheStreet Ratings 14 Wall Street, 15th Floor New York, NY 10005 www.thestreet.com Research Contact: 212-321-5381 Sales Contact: 866-321-8726 VALUATION SELL. This stock s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 0.48 indicates a significant discount versus the S&P 500 average of 3.24 and a significant discount versus the industry average of 4.36. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, proves to trade at a discount to investment alternatives within the industry. Price/Earnings NM Peers 25.42 Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings. 's P/E is negative making this valuation measure meaningless. Price/Projected Earnings 13.57 Peers 21.96 Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. is trading at a discount to its peers. Price/Book 0.48 Peers 4.36 Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. is trading at a significant discount to its peers. Price/Sales 0.93 Peers 4.53 Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. is trading at a significant discount to its industry on this measurement. DISCLAIMER: Price/CashFlow 0.33 Peers 20.78 Discount. The P/CF ratio, a stock s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. is trading at a significant discount to its peers. Price to Earnings/Growth NA Peers 1.30 Neutral. The PEG ratio is the stock s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. Ratio not available. Earnings Growth lower higher 63.47 Peers 30.44 Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. is expected to have an earnings growth rate that significantly exceeds its peers. Sales Growth lower higher -1.65 Peers 13.03 Lower. A sales growth rate that trails the industry implies that a company is losing market share. significantly trails its peers on the basis of sales growth The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided via the COMPUSTAT Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as other third-party data providers. TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained in this report constitutes, or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at http://www.thestreet.com/static/about/terms-of-use.html. PAGE 5