Investing.com -- Shares of DWS Group surged by 4% following the release of its fourth quarter results for fiscal year 2024. The company reported an adjusted profit before tax (PBT) that was 16% higher than the consensus estimates, excluding performance and other volatile revenues. This beat is attributed to better-than-expected management fees and adjusted costs.
DWS also announced long-term net inflows of €14.4 billion, surpassing the consensus forecast of €10.4 billion. The increase was primarily driven by strong demand for passive investment products, with alternatives also contributing positively. However, the company continued to experience outflows from active equity. Despite these outflows, the firm's assets under management (AUM) reached €1,012 billion, exceeding expectations.
The company's financial year 2024 dividend per share (DPS) of €2.20 was consistent with the consensus of €2.22. Looking ahead, DWS reaffirmed its fiscal year 2025 targets, including an earnings per share (EPS) of €4.50—above the Visible Alpha consensus of €4.10—and an adjusted cost-income ratio of less than 59%.
In addition to these reaffirmed targets, DWS introduced new medium-term goals, suggesting an EPS growth of approximately 10% per annum in fiscal years 2026 and 2027 and a dividend payout ratio of about 65%. The company also anticipates an improvement in its reported cost-income ratio by fiscal year 2027.
Analysts from RBC (TSX:RY) commented on the results, stating, "Overall, DWS delivered a positive update, with strong underlying earnings and net flows/AUM, and also unveiled ambitious FY26/27 targets."
DWS's expectations for the fiscal year 2025 include benefits from higher average AUM and an improved outlook for alternatives. Performance fees are projected to comprise 4-7% of total revenues, with other revenues also showing improvement year-on-year (YoY). The company has guided for costs to remain flat compared to fiscal year 2024.
Investors responded favorably to the announcement, reflecting confidence in DWS's ability to maintain its growth trajectory and achieve its ambitious medium-term targets.
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