Goldman Sachs upgraded Deutsche Bank to Buy from Neutral on Tuesday, citing accelerating revenue growth and improving operating leverage as key drivers of the lender’s turnaround. The U.S. investment bank also lifted its 12-month price target to €43.75 from €37, reflecting confidence in the German bank’s ability to close valuation gaps with European peers.
Deutsche Bank’s return on tangible equity is projected to expand by roughly 300 basis points over the next three years, Goldman said, with the metric forecast to surpass 13% by 2028. The bank’s ROTE is expected to reach 10.9% in 2025, 10.6% in 2026, 11.9% in 2027, and 13.1% in 2028. Goldman noted that achieving the lower end of this target implies approximately 7% in aggregate consensus profit upgrades for the company.
Capital metrics are also improving, with Deutsche Bank’s common equity tier 1 ratio forecast to exceed 14% by the end of 2026. From 2027 onward, the bank is expected to generate more than 175 basis points of capital annually, supporting potential increases in share buybacks once the CET1 ratio stabilizes above the threshold.
Net income forecasts from Goldman Sachs point to steady growth, with projected figures of €6.43 billion in 2025, €6.37 billion in 2026, €7.46 billion in 2027, and €8.58 billion in 2028. Earnings per share are similarly expected to rise, from €3.22 in 2025 to €4.80 in 2028.
Deutsche Bank has underperformed the broader European banks index by 16 percentage points year-to-date, partly due to concerns over private credit exposure and a slower-than-anticipated rebound in Germany’s macroeconomic environment. The bank now trades at a roughly 15% discount to peers on a price-to-earnings basis, a valuation Goldman described as "particularly undemanding."
Key catalysts identified by Goldman include consistent quarterly earnings delivery, higher share buyback levels once capital ratios improve, and supportive macroeconomic trends in Germany, such as infrastructure investment and growth in defense and IT services. Risks to the outlook include slower growth in private, corporate, and investment banking, higher operating or credit costs, and a deterioration in Germany’s economic conditions.
