Avanza Bank (Hold, TP: SEK230.00) - NII rising to the challenge
In 2022, a year burdened by falling stock markets, customer activity and cautious households, Avanza’s much- touted interest rate sensitivity proved to be a useful hedge, resulting in even greater than expected NII growth of 350% and stable earnings YOY in Q4. We reiterate our HOLD but have raised our 2023–2024e EPS by 6–7% and our target price to SEK230 (202). We see the growth outlook in Sweden as more challenging than historically and find the stock fairly valued at a 2023e P/E of c18x.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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