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Deutsche Börse on a Roll: Here's the Skinny on Its Uptrend and whether it's Still a Buy in 2022
Germany's Deutsche Börse is hovering near its all-time high, despite the global turmoil. Investors who jumped on the bandwagon in 2001 are now grinning at a whopping 1000% return. But can the good times keep rolling?
Börse's Boost from Bustling Markets
The Deutsche Börse thrives on amplified trading volumes and surging prices. So, it's all about faith in the markets, which tend to rise in the long haul. The Börse has made bank during market rallies, but volumes have slightly dipped now.
German Investors' New Obsession
Yet, there's solace in the German shareholder culture. It's gained a whopping 830,000 new members in the past year, even with the markets having a rough 12 months. If this trend persists and German folk lose their stock phobia, Börse as the local marketplace could pocket a hefty share of the loot.
Should You Buy-In?
But is it the right time to buy the stock? With a 2024 P/E of 18, the valuation has been high for some years and hasn't dipped below 20 since 2016.
However, there are some tempting reasons to invest in the Börse. First, dividends. Second, the booming shareholder culture. Plus, the exchange has some exciting projects in the pipeline, like those in the crypto sector.
Wanna dive deeper? Get the lowdown here on why Daimler Truck is doling out hefty dividends right now.
Disclosure: The author holds direct positions in the following financial instruments mentioned in the publication or related derivatives that could benefit from the price development resulting from the publication: Deutsche Börse
The Nitty-Gritty
To decide whether the Börse is a buy in 2022, several factors could come into play:
- Valuation: A high P/E ratio for 2024 projections doesn't necessarily mean overvaluation, depending on the sector and market conditions. Generally, a lower P/E ratio might indicate better value, but it depends on the growth prospects and stability of the company.
- Volatility: Volatility can boost revenues, especially for trading services. But overly volatile markets could lead to increased risks.
- Market and Sector Performance: Market conditions can significantly impact exchanges like Deutsche Börse. In 2022, global financial markets faced severe challenges due to geopolitical tensions, rising interest rates, and economic uncertainty.
- Financial Performance and Growth: Deutsche Börse showed robust growth in 2024, with a 15.21% increase in revenue. However, revenue turned negative in the last 12 months, indicating potential hurdles in the recent past.
Given these insights, an investment in Deutsche Börse in 2022 might have seemed appealing if investors anticipated the Börse capitalizing on trading volume volatility and staying competitive in the European market. However, the market conditions in 2022 were challenging, but the potential for increased trading activity due to volatility could have supported a positive outlook.
But without specific data from 2022, we can only speculate based on general market conditions and subsequent performance. As of 2025, despite positive analyst views, there are concerns about stretched valuations, which could limit potential gains. Thus, careful consideration of valuation and market volatility is key for making informed investment decisions.
- The Deutsche Börse, being an exchange that thrives on trading volumes and surging prices, has witnessed a slight decrease in trading volumes currently.
- The shareholder culture in Germany has gained 830,000 new members in the past year, despite the markets experiencing difficulties.
- The Börse's valuation has remained high for several years, with a 2024 P/E of 18, and has not dipped below 20 since 2016.
- Despite the challenges in 2022 global financial markets, an investment in Deutsche Börse might have seemed appealing due to the potential for increased trading activity due to volatility and staying competitive in the European market.
- The exchange has exciting projects in the pipeline, such as those in the crypto sector, which could be a tempting reason for investing in the Börse.
