Citi double upgrades this Brazilian financial firm, sees potential earnings acceleration ahead
A possible improvement in earnings performance could send shares of Nu Holdings higher over the coming months, according to Citi. The firm double upgraded the Brazil-based financial firm to buy from sell and doubled its price target to $18 from $9, which implies more than 37% upside from Tuesday’s close. “Despite concerns on the macroeconomic environment (which we think is performing better than expected), we see the recent quarters as a testament to the bank’s ability to not only navigate well but also accelerate in key portfolios while maintaining good asset quality,” analyst Gustavo Schroden wrote. “We see the earnings momentum as [likely] to accelerate, not only given Brazil and [total payment volume] dynamics but also given tailwinds from Mexico and Colombia and efficiency aiding ROE.” Schroden noted that the company has kept a “strong” pace of credit origination in portfolios such as the interest-earning component and credit cards in particular, highlighting the fact that it’s been able to keep its asset quality “under control.” An acceleration in total payment volumes could mean more opportunities for cross-selling across the company’s product portfolios, the analyst said. Additionally, the company could see a boost from its operations in Mexico specifically. “Mexican operations continue to ramp up, with solid developments in terms of deposits and loans,” he said. “The currently low [loan-to-deposit ratio] suggests room to increase leverage and contribute positively to results eventually.” Most of the analysts on Wall Street covering Nu Holdings are bullish, with 10 out of 17 having a strong buy or buy rating, per LSEG data. On the flip side, five analysts have taken a neutral view with a holding rating. Shares have had a solid year, gaining more than 26% in 2025. That’s almost three times the gains of the S & P 500 in the same timeframe. The stock also rose about 2% in premarket trading Wednesday.
<
