On Thursday, Jefferies made adjustments to its perspective on DWS Group GmbH & Co KGaA (DWS:GR), shifting the stock's rating from Buy to Hold while maintaining a steady price target of EUR41.00. The decision reflects the firm's view after certain expectations regarding DWS Group's dividend have been realized.
The change in rating comes after an evaluation of DWS Group's future earnings per share (EPS) for fiscal years 2024 and 2025. According to the firm's forecast, there will be no change to the EPS for 2024, while the EPS for 2025 is expected to increase by 5% to €3.47 and €4.13 respectively.
This projection is based on a higher Assets Under Management (AUM) base effect observed in the first quarter of 2024, along with an anticipated rise in performance fees for fiscal year 2025, particularly from the expected contribution of PEIF II starting to generate carry.
Despite the positive outlook on DWS Group's earnings, the firm's analyst noted that the potential for a special dividend, which was a key component of the previous Buy rating, has now been accounted for. This event has led to the reevaluation of the stock's potential, resulting in the downgrade to a Hold status.
The stock price target of EUR41.00 remains unchanged, suggesting that Jefferies does not foresee significant price movement for DWS Group's shares in the near term. The target is aligned with the firm's current assessment of DWS Group's financial prospects and market position.
Investors may consider this rating change as a sign that the anticipated catalysts for DWS Group's share growth have been largely factored into the current stock price, and that the company's stock may now be fairly valued at the current level.
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