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March 14th, 2022 | 12:04 CET

Deutsche Bank, wallstreet:online, PayPal - New opportunities after the slide

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Since Russia invaded Ukraine, there has been a mood of alarm on the stock exchanges. The EU's planned sanctions against Russia are causing severe turbulence in the banking sector and have led to disproportionately high share price losses. Although the exposure of German banks to Russia is manageable, Deutsche Bank and Commerzbank lost more than the German market as a whole. Papers of online brokers also lost heavily in recent weeks. With positive annual figures, one Company stands out here, which offers an attractive entry opportunity at a reduced level.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    wallstreet:online - New records

    Of course, the companies of online brokers were not spared from the general sell-off of recent weeks due to the Ukraine crisis. Thus, the largest German neobroker operator by assets under custody, wallstreet:online AG, lost in value from EUR 23 at the beginning of the year to currently EUR 16.90, despite forward-looking news in recent weeks. The analyst firm Alster Research sees a potential doubling candidate at the current price level and reiterates the price target of EUR 32 with a "buy" rating. Warburg Research even sees a price target of EUR 34 in its study.

    The research update is based on wallstreet:online AG's preliminary financial figures for 2021, which were published a few days ago, as well as estimates for 2022. The Company reported preliminary revenues of EUR 51.4 million, up 82% from 2020 and a new revenue record. Preliminary adjusted EBITDA before customer acquisition costs for Smartbroker grew 45% to EUR 17.5 million.

    For 2022, the Company expects revenues between EUR 62 million and EUR 67 million with adjusted EBITDA after customer acquisition costs between EUR 10 million and EUR 12 million. The most important project of the year will be the market launch of the Smartbroker Cloud Platform and the redesigned front end, including its own app. The launch is scheduled for the second half of the year. In addition to the app, new product categories such as cryptocurrencies are also to be launched.

    Deutsche Bank - Backpedaling after criticism

    A few days ago, it was said that turning its back on the Russian market was not an option. Now Deutsche Bank is bowing to pressure and drawing the consequences from Russia's war of aggression against Ukraine. "Like some of our international competitors, we are in the process of winding down our remaining business in accordance with legal and regulatory requirements," the financial institution announced Friday evening. It also said it was no longer doing new business there. The Company said it had already "significantly reduced" its exposure to Russia since 2014 when Russia invaded Crimea. In an earlier statement, the Company put its gross credit exposure in Russia at EUR 1.4 billion.

    From a chart perspective, a breach of the EUR 10.37 level would be viewed positively, while a setback below the previous low at EUR 8.16 would once again significantly worsen the overall chart picture. The Canadian bank RBC raised the price target for Deutsche Bank from EUR 11 to EUR 12 and reiterated its rating of "Sector Perform". The money house's long-term earnings growth target should be supported by rising interest rates and even stronger cost control, analyst Anke Reingen wrote.

    PayPal - Is the rebound coming?

    Long before the invasion of Russia, the correction in PayPal shares began. The US payment provider has lost more than two-thirds since its peak in August 2021 and is currently trading at USD 96.57. In the area around USD 94 lies a broad support zone. As the indicators are far in the overbought area, trading opportunities with a short-term potential of up to 20% could arise in the event of a successful test.

    Bank of America sees less potential for the stock. PayPal Holdings Inc. reported significantly slowing revenue growth in recent quarters. The operating margin, new customer growth, and international business were also down. The analyst, therefore, lowers the price target for the shares of PayPal from previously USD 175 to currently USD 107. As a result, there is a potential of only 7% at the current price level.

    Due to Russia's invasion of Ukraine, banks and financial services companies lost disproportionately. Deutsche Bank is closing its Russian business and is currently on the watch list, just like PayPal. In contrast, wallstreet:online was able to convince with the figures for the full year 2021 and appears attractive at current levels.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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