Fairly valued given short-term growth outlook

Avanza Bank (Buy, TP: SEK300.00) - Reassuring strategy update

We believe the new long-term strategic priorities given in the Q3 report should have de-risked any concerns over surging IT investments, while also providing a compelling case for continued Swedish growth for years to come. We agree with the bullish Swedish growth outlook, and see upside potential to the new 15% savings capital growth target in the next few years, fuelled by macro tailwinds for Swedish savers. We have made limited EPS changes, and reiterate our BUY and SEK300 target price.

New cost guidance to weigh on the share today

Decelerating earnings growth on the cards

Avanza Bank (Buy, TP: SEK300.00) - Do not discount Sweden yet

The threat of a growth slowdown for Avanza is probably overstated by the market, with fiscal and monetary policy tailwinds set to support still-robust growth in savings in Sweden for 2025–2026e. We have upgraded to BUY (HOLD), raised our target price to SEK300 (255) and our 2025–2026e EPS by 4–6% (6–9% above consensus).

Ramp-up in IT investments not in the cards

August web-activity insights

Web-activity data points to trading activity in August being up MOM for Avanza and Nordnet, suggesting a stronger uptick than usual seasonality. Consensus also seems to have overlooked a substantially increased number of trading days in Q3. Based on this, we see upside potential to consensus on Q3e brokerage income for both stocks (more for Avanza). The platforms are due to release their August statistics on 4 September.

Attractive but fairly valued long-term story

Q2 in line with ABGSC expectations. Earnings scenario intact, EPS CAGR of 4% (2023-‘26e). TP kept at SEK 240, reiterate HOLD.

Avanza Bank (Hold, TP: SEK255.00) - Benign margin trends for now

The main positive takeaways from the Q2 results were continued improvement in the brokerage margin and a stabilisation in the fund margin, both likely aided indirectly by the positive stock market trend YTD. Still, we see some downside risk to the brokerage margin in H2, with the CEO acknowledging current brokerage pricing may not be aligned with its “simplicity” aspiration. We have cut our 2024–2026e EPS by c2% and our target price to SEK255 (261), and reiterate our HOLD

Higher costs drives small Q2 miss

Fairly valued given current growth outlook

Trading data for Q2 has been slightly better than expected. Brokerage income and NII raise '24e-'26e adj. EPS by 1-4%. TP of SEK 240 (230), reiterate HOLD

Avanza Bank (Hold, TP: SEK261.00) - We expect record revenue

We forecast all-time high revenues in Q2 on robust customer activity and disciplined deposit rate reductions, despite headwinds from the Swedish rate cut and relatively fewer trading days. For H2, we see pricing risk partly due to new competition. We have made limited earnings forecasts changes and reiterate our HOLD, with a slightly raised target price of SEK261 (257).

June web-activity insights

Web-activity data points to trading activity in June being down MOM for Avanza and Nordnet, but somewhat stronger than the usual seasonality. We still see upside potential to consensus on Q2e brokerage income for both stocks. The platforms are due to release their June statistics on 3 July.

May web-activity insights

Web-activity data in May points to trading activity being roughly flat MOM for Avanza and Nordnet, but if anything, likely a little stronger for Avanza. Based on this, we continue to see upside potential to consensus Q2 brokerage income for both companies. The platforms are due to release their May statistics on 5 June.

Deposit rates cut by 0.25%

April web-activity insights

Web-activity data in April points to trading activity being down c7% MOM for Avanza and broadly flat for Nordnet. Based on this, we see upside to consensus Q2 brokerage income for both companies. The platforms are due to release their April statistics on 6 May.

Avanza Bank (Hold, TP: SEK257.00) - Understated activity resurgence

We expect rising stock markets and customer activity to offset much of the NII headwind from looming rate cuts, and to drive positive consensus earnings revisions for 2024–2025e. Our 2024–2026 EPS forecasts are broadly unchanged, leaving the stock trading at a 2025e P/E of c17x. With 10% upside potential to our unchanged SEK257 target price, we reiterate our HOLD.

Avanza Bank (Hold, TP: SEK257.00) - Early bloom

Rising stock markets have continued to drive customer activity higher in Q1, with customers making more and larger trades. We have raised our 2024–2025e EPS by 13–17% and our target price to SEK257(227). Trading at a 2025e P/E of c18x, we find the shares fairly valued and reiterate our HOLD.

February web-activity insights

Web-activity data in February points to trading activity being up c10% MOM for Avanza and c4% for Nordnet. Looking at consensus Q1 brokerage income, the data appears balanced for Avanza, but suggests some downside risk for Nordnet. The platforms are due to release their February statistics on 5 March.

Avanza Bank (Hold, TP: SEK227.00) - Hinged on the stock market

Facing NII headwinds from likely rate cuts starting in 2024e, a stock market bull run to revive brokerage and fund commissions is likely to be needed to buoy declining earnings in 2024–2025e. Our earnings forecasts for 2024–2025 are broadly intact; we reiterate our HOLD and SEK227 target price.