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.

Avanza Bank (Hold, TP: SEK227.00) - Green shoots

Avanza’s monthly statistics suggest that the rising stock market in Q4 translated into higher customer activity at year-end, boding well for activity recovery in 2024e in our view. We have raised our 2024–2025e EPS by 2–7% and our target price to SEK227 (199). Despite some likely recovery in commissions, we expect muted earnings growth for 2024–2025 due to headwinds from likely Swedish rate cuts. Trading at 2024e P/E of c17.5x, we find the shares fairly valued, and reiterate our HOLD.

November web-activity insights

Web-activity data in November points to trading activity being roughly unchanged MOM for Avanza and up 5–10% for Nordnet. Looking at consensus Q4 brokerage income, the November data suggests c15% downside risk for Avanza, with some potential upside for Nordnet. The platforms are due to release their November statistics on 5 December.

Avanza Bank (Hold, TP: SEK199.00) - Into hibernation mode

Despite the challenging macroeconomic environment and low customer activity, Q3 marked Avanza’s second-highest quarterly earnings ever and the highest quarterly net inflows since 2021. That said, we expect no earnings growth over 2024–2025 due to tough stock market conditions and the near-peak NII. We have raised our 2023–2025e EPS by 1–4% and our target price to SEK199 (196). We reiterate our HOLD.

Avanza Bank (Hold, TP: SEK196.00) - Autumn chills

Autumn chills

September web-activity insights

Web-activity data in September points to trading activity down c5% MOM for Avanza and roughly flat for Nordnet. This is in line with the platforms’ respective historical seasonality patterns. We see c15% potential downside risk to current consensus Q3 brokerage income for Avanza. The platforms are due to release their September statistics on 4 October.

Northern Lights

Avanza Bank (Hold, TP: SEK215.00) - Harvested

This note highlights the customer-centric business model that has earned Avanza the no.1 Swedish savings platform for more than a decade. However, we also highlight that Avanza’s growth outlook is cloudier than before, due to its now higher Swedish market share, greater recent emphasis on monetisation, and less-favourable macro outlook. We reiterate our HOLD but have cut our target price to SEK215 (223).

Avanza Bank (Hold, TP: SEK223.00) - Rising NII reliance

Avanza’s revenue mix shift to net interest income (from commissions) continued in Q2, as NII composed 47% of revenues; the highest yet in a quarter. Since we believe NII is likely to be near peak, we see the elevated NII reliance supressing Avanza’s earnings growth over the next couple of years; we forecast ~0% earnings growth over 2023–2025. We have left our 2023–2025e EPS largely intact (higher NII offset by lower commissions), and reiterate our HOLD and SEK223 target price.

Northern Lights

Avanza Bank (Hold, TP: SEK223.00) - ‘Less to the bank’

Q2 was a slow quarter for brokerage activity, and we forecast a 22% drop QOQ in brokerage revenues. We also expect rising deposit rates and inflows into Avanza’s savings account (with a generous deposit rate) to weigh on NII growth in the coming quarters. As a result, we have cut our 2023–2025e EPS by 4–12% and our target price to SEK223 (236). We reiterate our HOLD.

June web-activity insights

Web-activity data so far in June points to trading activity being up c10% MOM for both Avanza and Nordnet. This is despite negative historical seasonality patterns in June. Given this, consensus brokerage income in Q2e looks reasonable for both platforms. The platforms are due to release their June statistics on 5 July.

May web-activity insights

Web-activity data so far in May points to trading activity being flat or down a few percent MOM for Avanza and Nordnet, roughly in line with historical seasonality patterns in May. We see downside risk to consensus brokerage income for both platforms in Q2. The platforms are due to release their May statistics on 5 June.

April web-activity insights

Web-activity data so far in April points to trading activity being down 6–10% MOM for Avanza and Nordnet. This slightly soft start to Q2 and fewer trading days suggest Avanza’s brokerage income could drop more than consensus of -10% QOQ in Q2. However, we expect Avanza’s net interest income (NII) growth to accelerate significantly in Q2, after falling slightly QOQ in Q1, helping to buoy earnings growth in 2023e. The platforms are due to release their April statistics on 4 May.

Avanza Bank (Hold, TP: SEK236.00) - NII set to recover

Though the NII fell somewhat unexpectedly in Q1, we expect it to recover momentum in Q2 backed by the Swedish February rate hike, which Avanza has largely kept away from depositors. Avanza’s customers seem to be managing the worsened macro conditions well thus far, with robust net savings through Q1. We have cut our 2023–2025e EPS by 3-5% (on lower NII) and our target price to SEK236 (260). We reiterate our HOLD.