Commerzbank’s Record Quarter Widens Valuation Gap as UniCredit Offer Languishes

Record Q1 profits, higher guidance, and €600M AI plan boost Commerzbank stock 15% above UniCredit's €31 bid, as market doubts takeover.

The market is voting with its feet. While UniCredit’s all-share bid for Commerzbank values each share at roughly €31, the stock has been trading consistently above €36 in recent days – a premium of more than 15% that signals deep investor scepticism about the Italian lender’s approach. On Thursday, the shares were changing hands at €36.55, up nearly 1% on the day, and have delivered a 39.82% gain over the past twelve months.

The disconnect stems from Commerzbank’s strongest quarterly performance on record. Operating profit for the first three months of 2026 rose 11% to €1.358 billion, while net income after minorities climbed more than 9% to €913 million. Total revenues expanded 5% to €3.219 billion, with fee and commission income hitting an all?time high of €1.102 billion. Net interest income held almost steady despite lower benchmark rates. The bank’s CET?1 ratio stood at 14.5% at the end of March, giving management a buffer of 417 basis points above the minimum requirement – ample room for strategic investment, shareholder returns and restructuring.

Analysts have responded by lifting their price targets. JPMorgan raised its target from €36 to €37, retaining a “Neutral” rating, and noted that the strong first?quarter numbers and the revamped “Momentum 2030” strategy justify a higher valuation. Deutsche Bank Research went further, hiking its target to €42 from €40 and keeping a “Buy” recommendation. RBC rates the stock “Outperform” with a €43 target, while DZ Bank rates it “Kaufen” with a €42 target.

At the heart of “Momentum 2030” is a sweeping technology programme. Commerzbank plans to invest roughly €600 million in artificial intelligence by the end of the decade, from which it expects an annual value contribution of around €500 million from 2030 onward. The bank anticipates that AI will free up about a tenth of its capacity. Alongside this digital push, around 3,000 additional full?time roles are to be cut group?wide by 2030. The restructuring bill is estimated at €450 million, and management has promised a socially responsible approach using retirements, phased retirement and voluntary departure schemes – including a €50,000 bonus to make phased retirement more attractive. Compulsory redundancies are effectively ruled out.

The strong start to the year has also prompted a higher profit target. Commerzbank now expects net income of at least €3.4 billion for the full year 2026, up from the previous guidance of more than €3.2 billion. By 2028, the bank aims for a return on tangible equity of around 17%, rising to roughly 21% by 2030. For the 2025 financial year, management and the supervisory board are proposing a dividend of €1.10 per share, which would total around €1.2 billion – a sharp increase from the 65 cents paid a year earlier. Between September 2025 and March 2026, the bank completed two share buy?back programmes worth a combined €1.5 billion.

All eyes now turn to the annual general meeting in Wiesbaden on 20 May, where shareholders will vote on the dividend proposal and on an authorisation for further buy?backs of up to 10% of share capital. If approved, these measures would strengthen the bank’s defences against UniCredit’s hostile offer. The acceptance period for UniCredit’s exchange offer is expected to end on 3 July 2026, though regulatory approvals mean a deal could not close before 2027 at the earliest.

Technical indicators, however, sound a note of caution. The relative strength index stands at 83.3, suggesting the stock is overbought in the near term. That does not negate the positive momentum from the record results and the strategic overhaul, but it raises the bar for further short?term gains.

Labour opposition to the UniCredit approach remains firm. Ver.di, the powerful services union, continues to reject a potential takeover, citing risks to jobs and German banking locations, and supports Commerzbank’s independent course. For now, the combination of a record profit, an ambitious AI?led transformation and an unwelcome bid from Milan keeps the stock in a stand?off between operational strength and corporate control uncertainty.