Bank of America Securities analyst Mario Pierry maintained a Hold rating on Nu Holdings (NU – Research Report) yesterday and set a price target of $14.00.
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Mario Pierry has given his Hold rating due to a combination of factors impacting Nu Holdings’ financial performance. Despite some improvements, such as better asset quality and a reduction in the cost of risk, the company is experiencing pressure on its net interest margin (NIM) and overall profitability. The revenue growth was muted, showing only a slight increase quarter-over-quarter, partly due to a shift in loan mix towards lower-risk products, which contributed to a decline in average revenue per account.
Another consideration is the depreciation of the Brazilian real, which has distorted growth figures, impacting financial results. Although management has outlined an ambitious strategy for 2025 with global expansion plans, there are concerns about whether these initiatives might be premature, given the current stage of development in its key markets. Consequently, the limited potential upside to the price objective suggests a cautious approach, resulting in the Hold rating.
NU’s price has also changed slightly for the past six months – from $14.450 to $13.340, which is a -7.68% drop .