J.P. Morgan has recently upgraded Swedish investment firm Nordnet SAVE from “underweight” to “neutral”. The brokerage firm cited Nordnet’s potential to increase its market share in the long term due to its technological advantage over top competitor Avanza AZA.
Nordnet is currently transitioning to cloud technology, which allows it to launch new products and implement new functionalities at a faster pace than Avanza, which still needs to upgrade its technology and make the transition. J.P. Morgan believes that Nordnet’s increased marketing spend could potentially attract more customers at the expense of Avanza, which may struggle to keep up with the rapid pace of innovation in the industry.
However, J.P. Morgan also warned that Nordnet’s current valuation is seen as “very generous” and may be based on volatile net interest income and brokerage revenues, possibly leading to underperformance in the near future. Despite this concern, four out of 11 analysts covering Nordnet rate the stock as “strong buy” or “buy”, three as “hold”, and four as “strong sell” or “sell”. This mixed sentiment reflects the uncertainty surrounding Nordnet’s future performance in the market.
