DWS Initiated at Hold as Berenberg Notes Margin Concerns Amid Volume Growth

07:22 AM EDT, 10/20/2026 (MT Newswires) -- Berenberg initiated coverage of DWS Group (DWS.F) with a hold rating and a price target of 68 euros, saying the company's volume growth has come at the expense of margins. "DWS Group is a leading, Frankfurt-based European asset manager with EUR1,190bn in assets under management (AuM) across Active, Passive (Xtrackers) and Alternative asset management, backed by majority owner Deutsche Bank (DBK.F) (79.49%). Following a multi-year IT and structural transformation, operating costs have flattened, at cEUR1.8bn, while assets have expanded by c50% since 2020. However, volume growth has become heavily one-sided: essentially all long-term net inflows since 2024 have been driven by low-margin Passive and Cash products," according to a Tuesday note. Berenberg noted that assets under management in Xtrackers more than doubled to 455 billion euros by mid-2026, but organic growth lagged the European ETF market in most years from 2020 to 2025. The AuM share of the higher-margin Alternatives, meanwhile, slipped to 9.7% in the first half of 2026 from 13.2% in 2023. As such, Berenberg expects a below-consensus EPS compound annual growth rate of 6.3% for 2025 to 2028. Cumulative net flows is expected at 148 billion euros for 2026 to 2028, short of management's target of more than 160 billion euros.