DBOEY - Deutsche Börse: Stretched Valuation Limits Further Upside (Rating Downgrade)

2025-04-14 02:12:17 ET

Summary

• We have shifted our rating to neutral due to Deutsche Börse's all-time high valuation.
• Deutsche Börse announced a €500m share buyback and set FY25 guidance for net revenues at €6 billion and EBITDA at €3 billion, aligning with consensus expectations.
• Even applying higher targets and eliminating non-controlling interests from speculative acquisitions, we confirmed our neutral view.

Following our last update, Deutsche Börse (DBOEY)(DBOEF) stock price increased by more than 26% (Fig 1), outperforming the S&P 500 and our target price. Our buy rating was supported by 1) the SimCorp acquisition with a positive contribution to DB's earnings growth trajectory, 2) a conservative approach related to its outlook, 3) an ongoing buyback, and 4) a lower P/E ratio compared to its historical average. Given its all-time high valuation and limited EPS upside, we have now decided to move the company to an equal weight rating....

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