In a report released yesterday, Jorge Kuri from Morgan Stanley reiterated a Buy rating on XP, with a price target of $26.00.
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Jorge Kuri has given his Buy rating due to a combination of factors that highlight XP’s strategic focus on profitable growth and innovation. The company is prioritizing profitability over volume by allowing its sub-R$300,000 retail client base to shrink, which has historically been loss-making. XP plans to re-enter this segment once automation makes it profitable, potentially transforming it into a scalable business with recurring fees.
Additionally, XP’s core affluent clients, who hold over R$300,000 in assets, continue to drive profitability as they consolidate assets on the platform. The private banking sector presents a significant long-term opportunity, with the potential for substantial growth and profitability as it scales. Furthermore, XP’s investment in its IFA network is expected to transition from being a financial drag to a supportive factor, enhancing the company’s overall performance. These strategic initiatives, combined with technological advancements and favorable economic conditions, position XP for outsized growth in the future.
In another report released on September 24, Citi also assigned a Buy rating to the stock with a $23.00 price target.