DWS Group GmbH & Co KGaA

DWS: XFRA (DEU)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€76.00	Bwt	Bwgl

DWS Earnings: Despite Significant Outflows the 2024 Outlook Remains Positive; Fair Value Unchanged

Johann Scholtz ,

Jul 25, 2024

The second quarter of 2024 was challenging for no-moat DWS, marred by EUR 19 billion of client outflows. Nevertheless, net income grew by just over 10% quarter over quarter and year over year. Despite the outflows, management provided improved guidance for 2024 and remains optimistic about meeting its 2025 target. Client retention is an indicator that clients face switching costs. DWS’ patchy client retention history does not provide us with enough confidence that DWS benefits from sufficient switching costs to justify an economic moat rating. We maintain our fair value estimate of EUR 50/share.

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