Deutsche Bank cut to Neutral, Commerzbank cut to Sell at Goldman

[deutsche bank logo on their office for Rome. Deutsche bank is a german bank specialized in investment and financial services.]
BalkansCat

Goldman Sachs downgraded Deutsche Bank (NYSE:DB [https://seekingalpha.com/symbol/DB]) to Neutral from Buy and Commerzbank (OTCPK:CRZBF [https://seekingalpha.com/symbol/CRZBF]) (OTCPK:CRZBY [https://seekingalpha.com/symbol/CRZBY]) to Sell from Neutral, given changes in valuation after their stocks outperformed year-to-date.

"A combination of better growth, a steadier and steeper rates backdrop, and consistent beats and upgrades have driven a nearly 50% YTD rally in the European banks sector, notably outperforming broader European equities," analyst Chris Hallam wrote in a note to clients.

Overall, the analyst remains constructive on the outlook for European banks and sees ~10% average upside to Goldman's updated 12-month price targets and ~20% upside for several Buy-rated names.

Hallam's Buy-rated names are: UBS (UBS [https://seekingalpha.com/symbol/UBS]), ING (ING [https://seekingalpha.com/symbol/ING]), Lloyds Banking Group (LYG [https://seekingalpha.com/symbol/LYG]), BNP Paribas (OTCQX:BNPQF [https://seekingalpha.com/symbol/BNPQF]) (OTCQX:BNPQY [https://seekingalpha.com/symbol/BNPQY]), Bank of ireland (OTCPK:BKRIF [https://seekingalpha.com/symbol/BKRIF]) (OTCPK:BKRIY [https://seekingalpha.com/symbol/BKRIY]), Julius Baer (OTCPK:JBAXY [https://seekingalpha.com/symbol/JBAXY]) (OTCPK:JBARF [https://seekingalpha.com/symbol/JBARF]), NatWest Group (NWG [https://seekingalpha.com/symbol/NWG]), Banco Santander (SAN [https://seekingalpha.com/symbol/SAN]), KBC (OTCPK:KBCSF [https://seekingalpha.com/symbol/KBCSF]) (OTCPK:KBCSY [https://seekingalpha.com/symbol/KBCSY]), Nordea Bank (OTCQX:NRDBY [https://seekingalpha.com/symbol/NRDBY]) (OTCQX:NBNKF [https://seekingalpha.com/symbol/NBNKF]), DNB Bank (OTCPK:DNBBY [https://seekingalpha.com/symbol/DNBBY]) (OTCPK:DNBBF [https://seekingalpha.com/symbol/DNBBF]), UniCredit (OTCPK:UNCFF [https://seekingalpha.com/symbol/UNCFF]) (OTCPK:UNCRY [https://seekingalpha.com/symbol/UNCRY]), Intesa Sanpaolo (OTCPK:ISNPY [https://seekingalpha.com/symbol/ISNPY]) (OTCPK:IITSF [https://seekingalpha.com/symbol/IITSF]), and HSBC (HSBC [https://seekingalpha.com/symbol/HSBC]).

The rate curve has steepened year-to-date, and terminal rate expectations have become range-bound, Hallam said, giving investors more confidence in the medium-term outlook for net interest income.

Goldman's Neutral rating on Deutsche Bank (NYSE:DB [https://seekingalpha.com/symbol/DB]) contrasts with the SA Quant rating [https://seekingalpha.com/symbol/DB/ratings/quant-ratings]and the average Wall Street rating [https://seekingalpha.com/symbol/DB/ratings/sell-side-ratings], both at Strong Buy, and aligns with the average SA Analyst rating [https://seekingalpha.com/symbol/DB/ratings/author-ratings]of Hold.

MORE ON DEUTSCHE BANK, COMMERZBANK AG

* Commerzbank AG 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4810182-commerzbank-ag-2025-q2-results-earnings-call-presentation]
* Deutsche Bank Aktiengesellschaft 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4803984-deutsche-bank-aktiengesellschaft-2025-q2-results-earnings-call-presentation]
* Commerzbank unveils €1B buyback [https://seekingalpha.com/news/4479478-commerzbank-unveils-1b-buyback]
* Deutsche Bank stock gains as Q2 earnings benefit from strong trading income [https://seekingalpha.com/news/4471377-deutsche-bank-stock-gains-as-q2-earnings-benefit-from-strong-trading-income]
* Deutsche Bank nabs Outperform rating at RBC Capital [https://seekingalpha.com/news/4472698-deutsche-bank-nabs-outperform-rating-at-rbc-capital]