Last Update 06 Dec 25

Fair value Increased 1.51%

CBK: Earnings Momentum And Buyback Will Shape A Measured Outlook Ahead

Commerzbank's analyst price target has inched higher by EUR 0.50 to reflect analysts' expectations for stronger net interest income momentum and modestly faster revenue growth, partially offset by a slightly lower margin and a higher valuation multiple.

Analyst Commentary

Analyst views on Commerzbank remain mixed, with recent moves in both directions on ratings and price targets reflecting differing convictions on the sustainability of earnings momentum and the current valuation.

Bullish Takeaways

Bullish analysts see upside in net interest income after recent quarters showed improving trends, supporting expectations for a renewed phase of earnings acceleration.
Guidance is described as encouraging but conservative, leaving room for positive surprises if credit quality holds and deposit repricing remains manageable.
Higher price targets into the mid 30 euro range signal confidence that Commerzbank can deliver on growth and cost execution, even from an already re rated base.
The upgrade to a more positive stance suggests that the earnings trough is viewed as behind the bank, with further operating leverage expected as revenues grow faster than costs.

Bearish Takeaways

Bearish analysts argue that the shares now trade at a premium to the sector, limiting scope for multiple expansion and putting more pressure on flawless execution.
Neutral stances and only modest price target increases point to a view that most of the near term recovery in net interest income is already reflected in the share price.
Recent downward revisions to price targets highlight concerns that revenue growth and margins may not fully offset cyclical and regulatory headwinds.
The shift to Neutral from previously more positive ratings underlines caution that upside from current levels is constrained without a further step change in profitability.

What's in the News

UniCredit CEO Andrea Orcel signals openness to selling the bank's 26% stake in Commerzbank to a non EU buyer if shareholders receive an attractive offer, underscoring ongoing strategic tensions over a potential tie up that Commerzbank and the German government oppose (Reuters / German press).
Commerzbank raises full year 2025 guidance, now targeting a net result of around €2.9 billion before restructuring expenses and around €2.5 billion after, supported by an upgraded net interest income forecast of about €8.2 billion versus €8.0 billion previously.
The bank launches a large scale share buyback program of up to €1.0 billion, approved by the ECB and German Finance Agency, with repurchased shares to be redeemed, alongside a separate buyback of up to €15.5 million for its employee share program.

Valuation Changes

Fair Value has risen slightly, increasing by €0.50 to €33.52, reflecting a modest uplift in the intrinsic value estimate.
Discount Rate has edged down marginally from 6.06% to 6.06%, implying a slightly lower required return and modest support for a higher valuation.
Revenue Growth has risen slightly from about 8.01% to 8.07%, indicating a small improvement in long term top line expectations.
Net Profit Margin has slipped slightly from roughly 27.18% to 27.04%, suggesting a minor anticipated pressure on profitability.
Future P/E has increased modestly from about 20.7x to 21.1x, pointing to a small expansion in the valuation multiple applied to forward earnings.

Digital transformation and fintech adoption are driving lower costs, stronger margins, and growing appeal among younger, digital-first customers.
Leadership in German corporate banking and ESG finance positions the bank for sustained fee-based revenue growth and improved profitability.
Delays in digital transformation, interest rate shifts, regulatory costs, and economic headwinds could pressure Commerzbank's revenues, margins, and long-term profitability.

Catalysts

About Commerzbank

Provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally.What are the underlying business or industry changes driving this perspective?

Accelerating digital capabilities-such as enhancements to Commerzbank's trading platform, the rollout of AI-driven solutions, and robust fintech adoption-are positioning the bank to lower operating costs, expand fee-based revenues, and attract younger, digital-first customers, supporting margin and revenue growth over the coming years.
As German and broader European corporate investment cycles pick up in response to governmental stimulus and improved macro conditions, Commerzbank's leadership in the Mittelstand segment-along with 8% loan book growth in Corporate Clients-signals outsized future demand for trade finance, export lending, and transaction banking, laying the groundwork for higher revenue and earnings.
Ongoing restructuring, cost discipline, and digital transformation-including further branch reductions and automation-remain on track to improve the cost/income ratio towards the 50% target by 2028, driving structurally improved net margins and profitability.
The introduction of new account fee structures for private customers (already adopted by over 1 million clients out of 2.4 million) and continued high growth in net commission income (targeting 7%+ per year) reflect Commerzbank's successful shift to more resilient, fee-based earnings streams-offsetting interest rate pressures and underpinning sustainable revenue growth.
Substantial investment in ESG and green financing solutions, combined with deep roots in the German corporate sector, position Commerzbank to capture a growing share of high-margin, sustainable finance mandates, supporting an uplift in commission income and reinforcing long-term earnings momentum.

Commerzbank Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Commerzbank's revenue will grow by 7.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 21.8% today to 26.1% in 3 years time.
Analysts expect earnings to reach €3.6 billion (and earnings per share of €3.64) by about September 2028, up from €2.4 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €2.9 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.5x on those 2028 earnings, down from 14.9x today. This future PE is greater than the current PE for the GB Banks industry at 9.4x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.01%, as per the Simply Wall St company report.

Commerzbank Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Continued digital disruption by fintechs and digital-native challengers could erode Commerzbank's market share and compress margins if its digital transformation initiatives lag, directly impacting future fee income and long-term revenue growth.
Commerzbank's strong reliance on high net interest income is vulnerable to prolonged periods of low or negative interest rates in the eurozone; even with recent resilience, a shift in ECB policy or intensified competition for deposits could reduce NII and impair net margins.
Growing regulatory and compliance requirements-including those around ESG, anti-money laundering, and capital adequacy-will increase operational complexity and costs, potentially offsetting efficiency gains and pressuring net earnings.
Underperformance or stagnation in key business areas (such as corporate banking/retail banking in Germany or slower-than-expected loan and fee income growth from the Mittelstand sector) would limit revenue momentum and impede earnings growth targets.
Structural industry trends, including rising credit risks from economic downturns, the transition to a green economy, and possible future increases in loan defaults, expose Commerzbank to higher provisioning expenses and deteriorating asset quality, thereby lowering overall profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €31.915 for Commerzbank based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €36.1, and the most bearish reporting a price target of just €21.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €13.9 billion, earnings will come to €3.6 billion, and it would be trading on a PE ratio of 9.5x, assuming you use a discount rate of 6.0%.
Given the current share price of €31.95, the analyst price target of €31.92 is 0.1% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Commerzbank?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Digital Transformation And Sustainable Finance Will Secure Lasting Success