Avanza Bank (Buy, TP: SEK380.00) - Cost pain and gain
The Q4 report showed continued strong revenue trends and financial performance with yet another quarter with +40% ROE, supporting our view that the market is probably underestimating the sustainability of Avanza’s higher earnings trajectory since the pandemic. While we have some concerns about Avanza’s cost trend, we acknowledge that investing to maintain superior customer satisfaction is aligned with its long-term growth strategy. We reiterate our BUY and SEK380 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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