Is Deutsche Bank Stock Still Attractive?

Deutsche Bank stock (NYSE: DB) has risen by 14.6% over the last five trading days. In comparison, the broader S&P500 has declined by 0.53% over the last five trading days. The company released its first-quarter FY2021 results on 28 April, outperforming the consensus estimates of revenues and earnings. It reported profit figures of around €908 million – the highest in seven years, primarily driven by strong growth in investment bank and asset management segments. But will the company continue its upward trajectory over the coming weeks, or is a fall in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price using 20 years of historical stock data, returns for Deutsche Bank’s stock average around -0.9% in the next one-month (twenty-one trading days) period after experiencing a 14.6% rise in a week (five trading days). Further, the stock is likely to underperform S&P500 returns by 1.7% over the next month (twenty-one trading days).

But how would these numbers change if you are interested in holding Deutsche Bank’s stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Deutsche Bank’s stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF DB stock moved by -5% over five trading days, THEN over the next twenty-one trading days, DB stock moves an average of 1.1%, which implies an excess return of -0.4% compared to the S&P500.

More importantly, there is a 52.7% probability of a positive return over the next twenty-one trading days and a 45.7% probability of a positive excess return after a -5% change over five trading days.

Some Fun Scenarios, FAQs & Making Sense of Deutsche Bank Stock Movements

Question 1: Is the average return for Deutsche Bank stock higher after a drop?

Answer:

Case 1: Deutsche Bank stock drops by -5% or more in a week

Case 2: Deutsche Bank stock rises by 5% or more in a week

Is the average return for Deutsche Bank stock higher over the subsequent month after Case 1 or Case 2?

DB stock fares better after Case 1, with an average return of 1.1% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of -0.9% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Deutsche Bank stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Deutsche Bank stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For DB stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Deutsche Bank after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

DB’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Deutsche Bank stock by changing the inputs in the charts above.

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