Avanza Bank (Hold, TP: SEK250.00) - Falling into place
The Q4 report marked the end to a superior year in most aspects for Avanza with a record quarter for revenues and earnings. Fuelled by the surge in customer activity, Avanza’s revenue margin (revenues in relation to savings capital) spiked in 2020 to c50bp. We expect the favourable revenue conditions to be sustained in 2021 and have lifted our 2021–2022e EPS by 13–15%. As the stock is trading at a 2021e P/E of 26x, we find it fairly valued, and reiterate our HOLD and SEK250 target price.Avanza Bank Holding is the holding company of the Avanza Bank Group. Co.'s offerings comprise of: brokerage services, which enable investments in Swedish and foreign equities, bonds, funds, derivative financial instruments including futures, warrants and options, investment advisory services, pension products, pension insurance, as well as capital insurance services. Co. targets private individuals, high net-worth customers, corporate customers, day traders, fund managers and institutions.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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