Original-Research: Lang & Schwarz AG (von NuWays AG): BUY

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Original-Research: Lang & Schwarz AG - from NuWays AG

14.10.2026 / 09:00 CET/CEST

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Classification of NuWays AG to Lang & Schwarz AG

Company Name: Lang & Schwarz AG

ISIN: DE000LS1LUS9

Reason for the research: Initiation

Recommendation: BUY

Target price: EUR 20

Target price on sight of: 12 months

Last rating change:

Analyst: Simon Keller

Trading the retail renaissance; INITIATE WITH BUY

The market is pricing Lang & Schwarz as if its story ended with Trade

Republic. We disagree. The payment for order flow (PFOF) ban and Trade

Republic's abrupt change in order routing and trading technology have reset

earnings, but not the franchise. What remains is a profitable

retail-market-making platform with proprietary technology, substantial

capital and a highly attractive Structured Products business. The focus

should now shift from the earnings lost to the quality and growth potential

that remain.

The moat was built trade by trade. 30 years of pricing and risk decisions

are embedded in L&S' models, technology and routines. Around 60% of its c.

100 employees work in trading or IT, while two data centres and EUR 207m of

capital including the fund for general banking risks provide reliability and

risk-bearing capacity. These capabilities support quotes on more than 50,000

securities and distribution through over 20 partners with access to more

than 25m retail clients. Smaller, less information-sensitive retail orders

create attractive economics. Together, this gives L&S a mature,

capital-backed platform that can monetise retail flow across products,

partners and market cycles.

Structured Products are set to become the profit engine. Already in FY25,

the segment generated EUR 55m, or 38%, of group trading result on less than 1%

of volume. Including Treasury, this equates to c. EUR 83 trading profit per

executed trade versus c. EUR 0.84 in TradeCenter. With TradeCenter economics

now reset, we expect Structured Products to account for the majority of

group earnings from H2 26 onward. Rapid automated issuance captures shifts

in retail demand, while wikifolio adds recurring fees of an estimated c. EUR

7m p.a. before performance fees.

Growth has several routes back. Only 38% of German adults hold investments,

well below Nordic markets. Germany already counts c. 5m investors below 40,

a sizeable cohort still at an early stage of wealth accumulation. As their

portfolios and experience grow, funded brokerage accounts should

increasingly translate into equity and leveraged-product activity. Orders in

structured securities at selected German venues grew at an 11% CAGR from

2015 to 2025, with leveraged products accounting for 96% of 2025 orders.

This decade-long expansion demonstrates a structural trend beyond isolated

volatility spikes, in our view. New partnerships and the planned

Multi-Market-Maker model offer additional growth potential, with our

estimates allowing for only a modest initial contribution pending greater

visibility.

Q3 2026 marks the clean starting point. H1 26 still reflects the former PFOF

regime and the historically large Trade Republic flow. From Q3 onward, the

PFOF ban and routing change are fully reflected, making FY27e the first

fully standalone year. Its yoy comparison will look weak due to the

exceptional H1 26 comparison, but against the annualised clean H2 26e base,

our FY27e estimates imply c. 7% growth in trading result and c. 33% growth

in adjusted net profit. As cost measures take full effect, FY27e should mark

the beginning of renewed earnings growth under the post-PFOF setup.

The de-risked earnings base deserves a new valuation. L&S trades at only

7.9x FY27e PER, versus peers at 10.3x. Our residual income model, based on EUR

193m of economic book value, supports our PT of EUR 20, implying c. 30%

upside. INITIATE with BUY.

You can download the research here:

https://nwr.eqs-cockpit.com/fncls2.ssx?fn=redirect&u=71d7dc88f437ee7311d037adf5ab4e84

For additional information visit our website:

https://www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenkonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befindet sich in der vollständigen Analyse.

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