DWS Group Earnings: Bullish New Guidance Not Discounted in Depressed Multiple

No-moat DWS Group finished the year strongly with better-than-expected net client inflows, resilient fee margins, and sound cost control. Previously, we were skeptical about DWS' EUR 4.50 per share 2025 earnings guidance (which implies a 37% increase over 2024), but this is starting to look achievable. In new guidance, DWS expects 10% EPS growth for 2026 and 2027. DWS also now guides for EUR 150 billion of cumulative net client inflows over 2025-27, a 15% organic growth rate in assets under management. DWS currently trades at 10 times its forward earnings. We do not think this depressed multiple reflects its growth prospects or the high profitability and free cash flow generation inherent to its business model.