Goldman Sachs on Monday downgraded DWS Group to a "sell" rating from "neutral," and reduced its 12-month price target to €57 from €65. The broker said the change reflects a demanding valuation together with early indications of slowing across the German asset manager's principal growth drivers.
Goldman noted that DWS now trades at about the 90th percentile of its historical forward price-to-earnings range and at a premium to its peer Amundi - a reversal of a previous discount. The firm said that premium is difficult to justify in light of softening momentum across key businesses.
"DWS has re-rated over the past 12 months, supported by consistent delivery against ambitious targets and positive earnings momentum," Goldman analysts wrote, adding that recent growth has become "increasingly supported by performance fees and other non-core revenues, which are inherently more volatile and less repeatable than management fees."
Flows and passive business
Goldman highlighted signs of deceleration in DWS's passive franchise, which it said has contributed more than 100% of total group net inflows over the past decade. The broker pointed out that DWS's cumulative passive flows for 2025 were below 2024 levels, and that the first quarter of 2026 was weaker still, even as European exchange-traded fund flows reached record highs.
Goldman said quarterly flows remain below the roughly €10 billion to €11 billion per quarter that DWS would need to reach its multi-year €160 billion flow target. As a result, the firm lowered its net flow forecasts to €44 billion for 2026 and €53 billion for 2027, down from prior estimates of €47 billion and €60 billion respectively.
The broker also cited Morningstar data compiled by Goldman Sachs showing DWS has been losing share of European ETF net inflows to Amundi and BlackRock.
Active equities, alternatives and performance
Goldman drew attention to Active Equities, which represented about 30% of the group's management fees in fiscal 2025. On an asset-weighted basis, the majority of funds in this sleeve underperformed their benchmarks on both three-year and five-year trailing measures. Goldman noted that DWS has recorded net inflows into Active Equity in only one year over the past decade.
Alternatives flows were described as "muted," with cumulative net outflows in real estate of -€0.5 billion from 2023 through the first quarter of 2026.
Forecast revisions and valuation
Reflecting its revised flow and revenue outlook, Goldman trimmed its earnings-per-share estimates. The 2027 EPS forecast was cut by 5% to €5.35, while the 2026 estimate was lowered by 1% to €5.06. The broker attributed the downgrades to weaker organic asset-under-management growth assumptions and lower projections for other revenue.
Goldman also reduced its target forward price-to-earnings multiple to 10.3 times from 11.3 times, placing that multiple 0.5 times below Amundi's.
Management guidance and consensus
Company guidance cited by Goldman points to 10% to 15% earnings-per-share growth in fiscal year 2026. Goldman said consensus estimates sit at approximately 9%.
What this means
Goldman's downgrade centers on a combination of stretched valuation metrics and weakening momentum across the firm's passive, active equity and alternatives businesses. The broker's flow and EPS downgrades reflect a more cautious view on DWS's ability to sustain the pace of inflows and revenue mix that supported recent re-rating.