Mario Pierry, an analyst from Bank of America Securities, maintained the Hold rating on XP. The associated price target remains the same with $19.00.
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Mario Pierry’s rating is based on a combination of factors that reflect both positive and negative aspects of XP’s recent performance. On the positive side, XP’s net income exceeded expectations due to a tax credit, and the company demonstrated an improvement in its EBT margin, which has been expanding for three consecutive quarters. Additionally, the CET1 ratio increased, indicating a strong capital position that could support future capital distributions.
However, there are several challenges that justify the Hold rating. XP’s revenue growth has decelerated significantly, falling below the company’s guidance, and net inflows have been weaker than anticipated. The company also faced net outflows from corporate and institutional clients, driven by liquidity needs. Furthermore, while retail revenue yield showed slight improvement, the overall growth in retail revenue has slowed, impacted by a deceleration in fixed income revenue growth. These mixed results suggest a cautious outlook, leading to the Hold recommendation.
XP’s price has also changed moderately for the past six months – from $15.020 to $17.500, which is a 16.51% increase.