Swissquote Group Holding

We reduce our TP integrating the last financials.
The cut is mainly driven by reduced revenue expectations from crypto assets. Tumbling equity markets also have a negative impact on clients’ assets.
On the other hand, we continue to expect strong client asset inflows on the back of client account openings. Coupled with higher interest rates, this should partly offset the drop from transaction-based revenues.
Overall, our estimates for FY 22 land at the bottom of the firm’s guidance (CHF400m net revenues vs. CHF400m-420m) and below that of 2025. Despite that, fundamentals still imply a strong upside to the current share price, the latter pricing a worst-case scenario.
Our thesis does not change in that we strongly believe that the continued growing customer base is pure dry powder for better financial markets’ times.

Our EPS is reduced as we decreased our top-line expectations (from CHF463m to CHF 400m in 2022 and CHF 512m to CHF 476m in 2023). Our PBT margins are even slightly increased (46.5% in 2022 vs. 45.7% previously) as Swissquote has a mighty control over its costs (a material part of these being employees’ bonuses linked to the firm’s performance).

The NAV target is slightly cut as we have kept the same P/E multiple (10.5x) but decreased the average earnings over (23-24) to CHF 216m.

We cut our DCF valuation on the back of reduced revenue expectations for the next 3 years.