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Swissquote Group Holding

CR
Bloomberg   SQN SW
Internet banking/Fintech  /  Switzerland  Web Site   |   Investors Relation
Licensed to conquer Europe
Target
Upside 18.2%
Price (CHF) 167.5
Market Cap (CHFM) 2,568
Perf. 1W: 2.82%
Perf. 1M: 25.5%
Perf. 3M: 39.0%
Perf Ytd: 25.5%
10 day relative perf. to stoxx600: 9.45%
20 day relative perf. to stoxx600: 18.9%
Opinion change25/03/2022

Positive momentum ahead despite an unstable global environment

Change in OpinionBuy vs Add

We raise our recommendation to Buy following the FY 21 release and the integration of the firm’s ambitions. In fact, while 2021 has been an impressive year top-line and profitability wise for Swissquote, 2022 is expected to deliver the same absolute performance.
In fact, while one could expect 2022 to be rather grey given the current global environment and the fears of recession, we believe Swissquote to be well armed to face this challenging environment.

We expect the firm to increase its customer base consistently, offsetting the potential decrease in trading activity per customer, while we also consider that Swissquote’s customer profile (average trade of c.€20,000) should not be the most impacted by a global/ European recession.

Moreover, Swissquote is diversifying its product offering further with additional assets available to trade such as cryptos and crypto staking. The latter being a potential strong hedge against the financial markets’ turmoil and increasing reliance on asset-based revenues.

Propelled by an improving rates environment and a strong balance sheet, Swissquote also has the levers to go through these uncertain times swiftly and deliver all its potential as the global situation recovers.



Change in Target PriceCHF 231 vs 213+8.60%

Our target price increases as we update our model with the FY 21 figures and integrate management’s updated ambitions. The increase is mainly driven by a DCF improvement, the NAV restatement and the P/Book valuation improvement, on the back of shareholders’ equity materially growing.



Change in EPS2022 : CHF 13.1 vs 12.9+1.49%
2023 : CHF 16.0 vs 13.7+16.8%

EPS grow materially as we integrate the firm’s ambitions in our forecasts. While EPS 2022 is expected flattish vs. 2021, we believe in a material improvement in 2023 driven by a strong top-line growth propelled by customer onboardings, strong net new money flows, increased trading of crypto assets and an improving rates environment wrapped into an easing of the current global tensions.



Change in DCFCHF 288 vs 228+26.4%

In accordance with the EPS, our DCF valuation increases materially as we consider the firm’s ambitions for its top-line growth and pre-tax margin. We believe these to be achievable thanks to a more favourable environment and a structurally well diversified company. We expect pre-tax profit margins to be stable at around 47% over 2023 and 2024.



Updates

16 Jan 23 Earnings/sales releases
Swissquote meets 2022 expectations; onwards ...

10 Aug 22 Earnings/sales releases
Revenue decreased but client growth is pure dr...

17 Mar 22 Earnings/sales releases
A record year punctuated by diversification to ...

13 Jan 22 Earnings/sales releases
Buy the dip

06 Aug 21 Earnings/sales releases
Good numbers, increase in guidance, modest ...

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