Coffee, Advertising, and Clouds: Deutsche Bank Names Its Top Stock Picks for the Third Quarter
Deutsche Bank's stock portfolio, which is updated every three months, outperforms the S&P 500 in terms of returns
Germany's largest bank is betting on a twofold increase in Oracle's stock price over the next year / Photo: Tada Images/Shutterstock.com
Deutsche Bank has updated its quarterly “Fresh Money” list—a compilation of companies whose stocks analysts at Germany’s largest financial conglomerate believe have the best potential over the next 12 months. The list includes 41 stocks from five sectors—ranging from artificial intelligence and healthcare to industrials, according to CNBC. According to the network’s calculations, the Fresh Money portfolio has outperformed the U.S. market: its total return since its launch in 2017 has been 387%, compared to 351% for the S&P 500.
Who did Deutsche Bank bet on this quarter?
In the tech sector, one of Deutsche Bank’s top picks is cloud giant Oracle. For the market, this is an unconventional bet: last week was the company’s worst since 2001, with its stock price plummeting 19% amid growing investor concerns about the justification for spending on AI projects. Nevertheless, analyst Brad Zelnik believes that Oracle’s value will rise thanks to its strong position in the AI data center market and the undervaluation of its core business: cloud services, applications, and databases. The bank’s price target of $300 per Oracle share implies a 105% increase.
In the consumer sector, Deutsche Bank has placed its bet on Starbucks, anticipating a recovery in its operating metrics. Analyst Lauren Silberman writes that the chain is making the right investments in its business and is returning to sustainable sales growth and previous margin levels. To achieve this, the company is improving service in its coffee shops, revamping its loyalty program, cutting costs, and updating its menu more frequently. One example is the protein coffee the company has added for customers watching their diets. Deutsche Bank’s price target for Starbucks for the coming year is $120 per share, which is 17% higher than the closing price on the last day of June.
Another notable entry on the list is the AppLovin platform, which operates at the intersection of mobile gaming, marketing technology, and AI. Analyst Benjamin Black calls it “one of the most unique major internet assets”: He sees AppLovin’s growth potential primarily in its core mobile gaming advertising business, in a new direction in consumer advertising, and in the refinement of the platform’s AI-powered tools. Deutsche Bank’s current price target for AppLovin of $660 per share implies 28% upside potential.
Deutsche Bank's list of top investment picks for the third quarter also includes the fashion brand Ralph Lauren, health insurer Humana, hotel operator Wyndham Hotels & Resorts, and insurance giant AIG.
What does Wall Street think of these stocks?
According to FactSet data, the Wall Street consensus on Starbucks stock is neutral (Hold), though the coffee chain has three times as many positive ratings (Buy and Overweight—16) as negative ones (Sell and Underweight—5). Analysts are more optimistic about Oracle and AppLovin: Oracle’s average rating is “Overweight,” while AppLovin’s is “Buy.” Ralph Lauren, Wyndham Hotels, and AIG also received an “Overweight” consensus rating. Analysts are generally neutral (Hold) on Humana shares.
This article was AI-translated and verified by a human editor
