Overview#
Barclays has made significant changes to its ratings for several major banks in Switzerland and Germany. On Monday, the bank downgraded Deutsche Bank and upgraded Commerzbank, Julius Baer, and UBS, citing various economic factors and developments in the banking sector.
Deutsche Bank Rating Downgrade#
Deutsche Bank's rating was lowered to "equal weight" from "overweight," with its price target reduced from €39 to €32. Barclays also cut its earnings per share (EPS) estimates for 2026-2028 by 4-8%, which are now 3-7% below the consensus estimates compiled by the bank. Currently, Deutsche Bank trades at a price-to-earnings (P/E) ratio of 9.5 times its estimated earnings for 2026, indicating how much investors are willing to pay for each euro of earnings.
Commerzbank and UBS Upgrades#
In contrast, Commerzbank's rating was raised to "overweight" from "equal weight," with its price target increased from €36 to €42. Barclays raised its EPS estimates for Commerzbank by 2-8%, and the bank is expected to experience a compound annual growth rate of around 30% through 2025-2028, the highest among the European banks covered by Barclays.
UBS also saw its rating upgraded to "equal weight" from "underweight," with the price target increased from CHF 33 to CHF 34. UBS is trading at a P/E ratio of 14 times its estimated earnings for 2026, with a projected return on tangible equity of 13% for 2027.
Julius Baer Upgrade#
Julius Baer was upgraded to "overweight" from "equal weight," with its price target lifted from CHF 63.70 to CHF 71. Barclays raised its EPS estimates for the bank by 1-2%. Julius Baer currently holds excess capital above its required threshold, which may support its market position moving forward.