Deutsche Bank (NYSE: DB) cratered by 4% on Monday morning, hitting record lows, after UBS analysts’ downgrade the stock from a sell rating to neutral, according to CNBC.
Along with the downgrade, UBS analysts slashed its price target for Deutsche Bank from EUR 7.80 to EUR 5.70 per share. On the German stock exchange, Deutsche Bank saw its shares fall as low as EUR 6.67, while its New York Stock Exchange listed stock hit USD 7.39 per share.
“We downgrade to sell because we don’t expect operating conditions to improve anytime soon. Deutsche remains a levered market play vulnerable to external events and rising rates are currently a distant hope,” UBS analysts said in a note on Monday.
Earlier this month, shareholder advisory group Institutional Shareholder Services (ISS) called for stakeholders to issue a vote of no confidence in the management.
The German bank also faces pressure from investors to cut its investment banking division, especially after the failed merger talks with Commerzbank.
“With the share price at close to all time lows, spreads and CDS (credit default swaps) stubbornly high and profitability depressed, the urgency to act is high we think,” UBS said in its note.
“DB’s IB would have been a key beneficiary of a deal with Commerzbank, as it could have helped to drive down funding costs and spreads and balance the overall profile.” continued UBS analysts.
Deutsche Bank has seen its shares continuously fall since its peak in 2007. The bank has faced immense pressure and backlash over the past several years, from settlements with the U.S. Department of Justice, to management changes, weak earnings, constant restructuring, and merger speculations.
Deutsche Bank shares have now fallen by 9% this year and 40% year-over-year.