Nu Holdings: Strong Financial Performance with Limited Upside Potential

In a report released yesterday, Mario Pierry from Bank of America Securities maintained a Hold rating on Nu Holdings, with a price target of $16.00.

Mario Pierry’s rating is based on a combination of factors that reflect both positive and negative aspects of Nu Holdings’ recent performance. The company reported a significant increase in net income, surpassing expectations, and achieving a record-high return on equity. This was largely due to lower-than-expected provision charges, although it came at the cost of reduced reserve coverage. Despite these positive results, the contraction in net interest margin and slower fee income growth indicate some underlying challenges.
Furthermore, while Nu Holdings has shown strong loan growth and progress in markets like Mexico, the recent 31% rally in the stock price limits the potential upside to the price objective. The stock’s current valuation suggests that the market has already priced in much of the positive news, leading to the decision to maintain a Hold rating. This balanced view considers both the impressive financial performance and the limited room for further stock appreciation.

According to TipRanks, Pierry is a 2-star analyst with an average return of 1.4% and a 45.76% success rate. Pierry covers the Financial sector, focusing on stocks such as Nu Holdings, Itau Unibanco, and XP.

In another report released on November 11, UBS also maintained a Hold rating on the stock with a $16.00 price target.