Barclays on Friday positioned two online brokerages as its preferred plays across European and Nordic investment platforms, initiating coverage of flatexDEGIRO at Overweight and upgrading Sweden's Avanza to Overweight. The bank kept Nordnet at Underweight, citing concerns about valuation.
The research team pointed to sector-leading profitability metrics, saying platforms collectively deliver high earnings growth and returns on equity. Barclays quantified that outperformance with an average RoE of about 34 percent, placing these digital brokers ahead of exchanges, alternative managers, and traditional asset managers.
On Avanza, Barclays sees scope for upside to current consensus estimates. The bank put a potential earnings upside in the 5 to 8 percent range versus consensus forecasts and argued that the market is undervaluing Avanza relative to Nordnet despite comparable growth prospects. Barclays described Avanza as holding a dominant share in the Swedish savings market and said there remains room for additional penetration of household savings capital despite some investor concerns about saturation.
Barclays also identified Avanza's planned expansion into Denmark as strategically complementary. The analysts view the Danish pension market as ready for greater digital adoption and said it aligns with Avanza's existing strengths in savings-oriented retail services. Reflecting their more constructive stance, Barclays raised its price target on Avanza to 420 crowns from 340 crowns.
FlatexDEGIRO, which Barclays noted is the largest online broker in Europe by client count and operates in 16 countries, received an Overweight initiation. The bank expects the firm to deliver annual earnings per share growth in excess of 20 percent through 2028. By contrast, Barclays sees Nordic platforms delivering roughly 10 percent EPS growth annually over the same horizon, with flatexDEGIRO's stronger trajectory driven by a combination of margin expansion and revenue growth.
Barclays highlighted the value of flatexDEGIRO's pan-European footprint as a structural advantage. The bank said this positioning should allow the company to benefit from the European Union’s Savings and Investment Union initiative, which aims to shift household deposits into capital markets. Barclays also observed that the stock has de-rated sharply this year, trading at around 14 times 2027 earnings versus a peak of 22 times, a move analysts view as overdone. Additionally, the analysts described flatexDEGIRO as the most rate-sensitive of the platforms, which in the current macro environment could provide further support.
By contrast, Nordnet remained an Underweight holding in Barclays' view. While the bank raised its price target on Nordnet to 310 crowns, analysts see limited earnings upside versus consensus and believe the market has largely priced in the company's growth trajectory. Barclays noted that Nordnet trades at about 23 times 2027 earnings, making it the priciest of the three platforms on that metric.
On Nordnet's strategy, Barclays acknowledged the logic of its planned expansion into Germany but described the move as slow-moving and dependent on execution. That assessment informed the bank's caution on the stock despite the company’s strategic rationale for growth abroad.
Summary
- Barclays names flatexDEGIRO and Avanza as its top European and Nordic online platform picks with Overweight ratings.
- The bank keeps Nordnet at Underweight due to valuation concerns and limited upside to consensus estimates.
- Barclays highlights the sector's strong RoE and growth potential, while differentiating across companies by scale, geography, and rate sensitivity.
Key points
- Sector fundamentals: Barclays cites an average RoE near 34 percent for the platform sector, ahead of other asset management and exchange segments, suggesting robust profitability.
- Avanza outlook: Barclays estimates 5-8 percent earnings upside to consensus for Avanza, raises its price target to 420 crowns, and flags expansion into Denmark as a growth vector.
- FlatexDEGIRO advantages: Initiated at Overweight, flatexDEGIRO is seen delivering over 20 percent annual EPS growth through 2028, supported by margin expansion, revenue growth, and a pan-European footprint.
Risks and uncertainties
- Valuation risk for Nordnet - Market pricing appears to already reflect the company's projected growth, leaving limited upside; Nordnet trades at about 23 times 2027 earnings.
- Execution risk for Nordnet's German expansion - Barclays described the move as strategically sensible but slow and dependent on effective execution, which introduces uncertainty into future growth outcomes.
- Macro and rate sensitivity - FlatexDEGIRO is noted as the most rate-sensitive platform, so changes in interest rates and broader macro conditions could materially affect performance.