By Scott Kanowsky
Investing.com -- Shares in DWS Group (ETR:DWSG) rose on Wednesday after Germany's largest asset manager unveiled new financial targets that would represent an improvement to analysts' expectations.
In a presentation released during its annual capital markets day, DWS, which is majority-owned by Deutsche Bank (ETR:DBKGn), said it is aiming to reach earnings per share of €4.50 in 2025.
DWS also hinted at a potential extraordinary dividend of up to €1 billion by 2024, along with a payout ratio of 65% of earnings from 2025. In calculations done by Reuters, these shareholder payouts would total €2.9B in 2025, amounting to nearly half of the firm's current market value.
Analysts at Morgan Stanley said the new profit target, if reached, would mark a 15% increase to consensus estimates for 2025, adding that the capital return plans are "positive."
RBC analysts called the goals "ambitious, but overall achievable" in a note to clients, but warned that the outlook is dependent on market conditions. They flagged as well that the one-time costs linked to DWS' growth strategy remain unclear.
The new targets come as German and U.S. officials have been looking into allegations that DWS made misleading claims about its sustainability investments - a practice dubbed "greenwashing."
Former chief executive officer Asoka Woehrmann stepped down from the post in June following a raid by German officials - including public prosecutors, federal police, and financial regulators - on the firm's Frankfurt office. He was replaced by Stefan Hoops, previously the head of Deutsche Bank's corporate bank.
Meanwhile, a German consumer group filed a lawsuit against DWS in October, claiming one of its funds failed to accurately portray its green record in its marketing material to investors. A hearing on the case is scheduled for March.
Shares in DWS are down by just under 14% over the past one-year period.