UPDATE: Bank of America Downgrades Deutsche Bank On Discount Risk

In a report published Monday, Bank of America Merrill Lynch analyst Michael Helsby downgraded

from Neutral to Underperform and lowered the price objective from EUR35 to EUR27. Helsby noted that the company has been under pressure to either raise capital or downsize. The analyst wrote, "With near term capital pressures building and in our view the threat of franchise damage high, DB has chosen to raise. The cost is at least a 25% reduction in EPS power, more if we include the cost of AT1. With DB offering no obvious offsets it has positioned the bank as a geared play on FICC recovery." With Deutsche Bank may be on the right track for long-term development, the analyst commented that the company "risks being structurally valued at a discount to book." The analyst cut his 2015 EPS estimate by 26 percent, leaving divisional estimates relatively unchanged. Shares of Deutsche Bank closed at $42.17 on Friday and are currently trading at $41.48, down 1.66 percent.