Morgan Stanley lifts flatexDEGIRO stock rating, raises target to EUR21

Published 13/02/2025, 10:40
Morgan Stanley lifts flatexDEGIRO stock rating, raises target to EUR21

On Thursday, Morgan Stanley (NYSE:MS) upgraded flatexDEGIRO AG (FTKn:GR) (OTC: FNNTF) stock rating from Equal-weight to Overweight, setting a new price target of EUR21.00, up from the previous EUR13.70. Stifel analysts highlighted the company’s potential to benefit from an increase in retail investor participation in the financial markets. They noted flatexDEGIRO’s business model is particularly well-suited to capitalize on transactional activities compared to its European platform peers.

The analysts forecast a compound annual growth rate (CAGR) of approximately 13% in commission income for flatexDEGIRO from 2025 to 2027, which is above the consensus estimates of 3% and 1% for 2025 and 2026, respectively. They also pointed out that this growth is expected to outpace the peer average of around 10%, even without considering potential gains from the company’s crypto offerings.

Morgan Stanley is anticipating more details on flatexDEGIRO’s crypto opportunities at the upcoming Strategy Day on February 25. They also expect the company to experience headwinds in net interest income (NII) in 2025-2026 due to declining rates but still project flatexDEGIRO to achieve above-peer earnings growth during the same period, with a projected 13% CAGR compared to the peer average of approximately 7%.

The analysts further noted that flatexDEGIRO is trading at 14.2 times its projected 2026 earnings and 12.1 times its projected 2027 earnings, which they consider to be relatively undemanding compared to the long-term average P/E ratio of 14.1. They also mentioned the positive build-up in excess capital, which they believe offers additional optionality for the company’s future.

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