Here's Why Deutsche Bank Stock Is Worth Adding to Your Portfolio

Deutsche Bank AG DB has shown promising momentum over the past year,  supported by earnings strength and robust capital management. With a solid liquidity profile, strong revenue growth, and ongoing strategic transformation, DB merits attention for investors.Over the last year, shares of DB have gained 63.8%, outperforming its industry’s growth of 27.2% and close peers, Barclays PLC BCS and UBS Group AG UBS. While shares of BCS recorded an increase of 56.6%, UBS rose 4.5% in the same period.Price PerformanceImage Source: Zacks Investment ResearchWhat Makes DB Stock Worth Betting onStrong Deposit Base: Deutsche Bank continues to benefit from a well-diversified and steadily expanding deposit base. Over the last three years ending 2024, deposits recorded a compound annual growth rate (CAGR) of 3.3%, reflecting stable inflows and client trust across both retail and corporate channels. As of March 31, 2025, total deposits stood at €665 billion, reflecting year-over-year growth. The stable deposit balance will strengthen the company’s balance sheet.Steady Revenue Growth: The bank’s net revenues have witnessed a three-year (2021–2024) CAGR of 5.8%. This momentum has been fueled by the bank’s strategic focus on capital-light businesses such as its private banking, asset management, and corporate banking units. Notably, this upward trend continued into the first quarter of 2025, driven by strong net interest income and fee-based revenues. The bank is increasingly seeing stronger contributions from wealth and transition financing deals, while the acquisition of Numis in 2023 has expanded its reach in advisory and asset management. These developments reflect Deutsche Bank’s commitment to sustainable growth beyond traditional investment banking operations and are expected to aid revenues in the upcoming period.Sales EstimatesImage Source: Zacks Investment ResearchStrong Liquidity: The bank maintains a sound liquidity position, with a liquidity coverage ratio of 134% as of March 31, 2025. Its cash, central bank, and interbank balances totaled €159 billion, compared with only €15.1 billion in short-term borrowings. The bank’s strong credit standing is reinforced by long-term issuer ratings of ‘A’ from Standard & Poor’s and ‘A1’ from Moody’s. This renders the company’s favorable access to debt at attractive rates, reducing the likelihood of default on interest and debt repayments if the economic situation worsens.Strategic Partnership and Digital Transformation: DB has embarked on a digital transformation drive, focusing on cloud migration, artificial intelligence (AI), and automation to enhance operational efficiency and client services. In May 2025, Deutsche Bank reinforced its strategic partnership with International Business Machines Corporation (IBM) through a new license agreement, gaining greater access to IBM’s advanced software solutions, including the watsonx AI portfolio, to streamline workflows, reduce costs, and enhance client services. Separately, it teamed up with Singapore-based finaXai, a Singapore-based AI company, to expand Project DAMA 2 to enhance its multi-chain asset servicing pilot using explainable AI. Additionally, in June 2024, Deutsche Bank expanded its relationship with Bitpanda to support real-time, API-based payments in Germany. These initiatives reflect the bank’s commitment to innovation and digital transformation.Sustainable Capital Distribution Activities:  The company plans to return excess capital to shareholders through dividends and share buybacks look impressive. Management continues to execute on its capital distribution strategy, which includes a €1 per share dividend and a €750 million share repurchase plan announced in January 2025. These actions support the company’s longer-term goal of distributing over €8 billion between 2022 and 2026. The combination of consistent profitability and a prudent capital buffer provides confidence in the sustainability of these returns.Earnings Strength: Deutsche Bank has exhibited strong earnings performance over the past years. For the next three to five years, its projected earnings per share growth (EPS) of 35.8% is higher than the industry’s average of 10.2%.The projected EPS growth of BCS is 16.7%, whereas that of UBS earnings is expected to decline by 4.8% in the same period.Looking ahead, the bank’s earnings are projected to grow 116.2% in 2025 and 11.3%  in 2026.Earnings EstimatesImage Source: Zacks Investment ResearchFavorable Valuations: DB stock looks undervalued right now with respect to its price-to-book (P/B) and price-to-earnings (P/E) (F1) ratios. It has a P/B ratio of 0.63X, lower than the industry average of 1.19X. Moreover, the company’s P/E (F1) ratio of 10.76X is below the industry average of 9.61X. The P/B and P/E (F1) ratios of BCS were 0.68X and 8.0X, whereas those of UBS were 1.17X and 17.69X, respectively.How to Approach DB Stock Now?Deutsche Bank’s transformation strategy includes revenue diversification and efforts to boost digital transformation look encouraging.The strong liquidity and shareholder-friendly capital return policies further enhance its investment profile. Hence, investors can consider adding DB stock to their portfolio at the current level.The bank currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS): Free Stock Analysis Report Deutsche Bank Aktiengesellschaft (DB): Free Stock Analysis Report UBS Group AG (UBS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks