Analyst Jorge Kuri from Morgan Stanley reiterated a Buy rating on Nu Holdings (NU – Research Report) and keeping the price target at $18.00.
Jorge Kuri has given his Buy rating due to a combination of factors that highlight Nu Holdings’ strong market position and growth potential. The introduction of private payroll loans is seen as a significant opportunity rather than a threat, as concerns about cannibalization of high-margin unsecured personal loans are considered exaggerated. The overlap between existing unsecured loans and the new payroll loans is minimal, with only a small percentage of customers eligible for the latter, thus limiting refinancing risks.
Moreover, Nu Holdings has a substantial opportunity to increase its market share, as it currently serves customers with a large portion of Brazil’s unsecured loan balances but holds only a small share of this market. The expansion of the lending market through more affordable loan terms and the attractive revenue profile of payroll loans, despite lower interest rates, further bolster the company’s growth prospects. These factors, combined with the lower loss ratios associated with payroll loans, make Nu Holdings a compelling investment choice.
According to TipRanks, Kuri is an analyst with an average return of -3.1% and a 45.83% success rate. Kuri covers the Financial sector, focusing on stocks such as XP, Nu Holdings, and Inter & Company Incorporation Class A.