Avanza Bank (Buy, TP: SEK500.00) - Profit turnaround expected soon
We expect Q1 to be a peak quarter in cost growth, which should taper off from here and return Avanza to positive earnings growth as of next quarter. Stock markets and trading activity, however, fell the end of the Q1, which is why we have reduced our EPS estimates by 4%. We reiterate our BUY and SEK500 target price, attracted by the long-term growth case in the Swedish savings market as well as short-term triggers including probable higher short-term interest rates with rate hikes in Sweden likely this year.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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