Swissquote Group Holding

Our target price increase is mainly driven by our DCF update (see more details below). We have upgraded most of the financials, also positively impacting the Peer-based valuation.
Overall, we confirm our very positive opinion on Swissquote, massively benefiting from the higher rates environment and believe in several catalysts ahead (M&A, innovation, some inflows from Credit Suisse notably).

Our EPS forecast is massively increased as we have upgraded our net interest income expectations (from CHF144m and CHF184m for FY 23 and FY 24 to CHF198m and CHF233m for FY 23 and FY 24, respectively). This is mainly driven by continued interest rate hikes across Switzerland, the EU and the US.
This incremental net interest income flows through the P&L with very few underlying costs. As a result, although we have slightly increased the cost base given Swissquote's tendency to leverage on highly profitable years to expand further, our pre-tax profit margin forecast increases from 48.5% and 49.9% for FY 23 and FY 24 to 49.7% and 51.1% for FY 23 and FY 24, respectively.

As described in our EPS section, the DCF upgrade is driven by, overall a much stronger top line (from CHF486m and CHF557m for FY 23 and FY 24 to CHF541.5m and CHF618.8m for FY 22 and FY 24, respectively) while keeping a very stable cost base.