Swissquote Group Holding

Our NAV upgrade reflects for the most part the roll-forward of the long-term fair EV/EBITDA multiple (10x) on the 3-year average EBITDA as we now integrate the 2026 EBITDA in our calculation and have excluded the 2023 EBITDA, the former being higher than the latter. We have also rolled-forward the integration of the group’s net cash position in 2026 into the NAV calculation, which is a higher than previously projected cash position, thus having a positive impact on the NAV.

The slight upward change in our target price on Swissquote mostly reflects the increase in Swissquote’s projected dividend yield and our NAV upgrade.

The former is based on the management’s decision to upgrade its dividend policy to a 30% fixed dividend pay-out ratio target instead of a dividend growth policy from 2023. This decision has resulted in a considerable increase to our dividend projections: CHF5.84 dividend per share vs CHF3.67 for 2024 and CHF5.57 dividend per share vs CHF3.92 for 2025.

Our 2024 EPS upgrade has also had a stronger positive impact on the TP than our 2025 EPS downgrade, reflecting positively on the group’s multiples.

We remain confident in Swissquote’s ability to thrive in all market weathers. We will however remain watchful of any positive or negative developments regarding the current crypto cycle (and whether the crypto summer will last), the return of market volatility (with its impact on Swissquote’s client assets and activity) and policy rates developments across geographies, which may impact positively or negatively Swissquote’s top line in the coming quarters.

The 2023 EPS came slightly below our previous estimates (-4%) due to lower revenue (-3%) on the back of weaker fee income and lower eforex income than anticipated, offset in part by lower opex (-2%).

Building on anticipated increased activity and market volatility, we have upgraded our 2024 EPS estimates as we now expect net revenue to be 4% higher than previously anticipated on the back of considerably higher estimated crypto assets income (CHF70m vs CHF26m) on the back of a continued acceleration in crypto rally with a $125k end-of-year bitcoin target price as a benchmark. This will be offset in part by lower fee income reflecting increased fee expenses, slightly lower transactions per account, slightly lower than expected trading client assets and lower fee margins compared to our initial projections and a lower eforex income, as a result of lower accounts and volume per account than previously estimated. Combined with an upward opex revision, reflecting the stronger wage increases observed in 2023 compared to our expectation, we now expect the pretax result to be 7% higher than our initial projections, at CHF352m (51.7% pretax profit margin).

As our market scenario implies declining activity and volatility in 2025, we have revised our revenue projections downward (-6%) due to a combination of lower net interest income (linked to lower rates), lower fee income and lower eforex income, all partly offset by lower opex, resulting in a 5% downward revision of the pretax result to CHF335m (51.4% pretax profit margin).