First Read Deutsche Boerse Q2:26 - A 3% EBIT beat, driven by Trading & Clearing and Securities Services revenues

Research evidence excerpt

First Read Deutsche Boerse Q2:26 - A 3% EBIT beat, driven by Trading & Clearing and Securities Services revenues

Forecast returns

Forecast price appreciation 4.4%

Forecast dividend yield 1.9%

Forecast stock return 6.3%

Market return assumption 7.8%

Forecast excess return -1.5%

Company Description

Deutsche Boerse is a German-based exchange, infrastructure and data group, operating one

of the largest exchanges globally. It operates in four segments: Investment Management

Solutions (including SimCorp), Trading & Clearing, Fund Services, and Securities Services.

Deutsche Boerse has its headquarters in Frankfurt and offices in multiple regions worldwide.

It has been listed on the Frankfurt stock exchange since 2001.

Valuation Method and Risk Statement

Our price target for DB1 is derived using a two-stage DCF calculation where we value the NII

stream differently.

DB1 is exposed to a number of risks, the most important being regulatory. The

implementation of new regulations (such as an FTT) could have a material impact on the

bottom-line of DB1. DB1 is exposed to any regulations with regards to how they charge data

fees to market participants. These fees account for an important part of DB1's revenue base

and any regulation capping the market data charges could have a negative impact on the

exchanges. DB1 faces competitive risks from the number of alternative trading venues that

operate in Europe. These platforms have been winning market share from the exchanges over

the past 9 years and further market share gains threaten the earnings power of the

exchanges. DB1 is also exposed to market risk as equity and derivative volume growth have

an impact on the bottom-line of these institutions. As most of the exchanges calculate their