Gold prices set for weekly drop as dollar surges; Trump tariff action in focus
On Thursday, Citi analyst Ashwin Shirvaikar maintained a Sell rating on Nu Holdings (NYSE:NU), commonly known as Nubank, with a consistent price target of $9.00. The target represents one of the most conservative views among analysts, who have set targets ranging from $9.00 to $18.90, according to InvestingPro data. Despite trading near $11.40, the stock has shown remarkable momentum with an 11.2% gain in the past week. In his analysis, Shirvaikar delved into the seasonal trends of the banking industry in Mexico, referencing data from the National Banking and Securities Commission (CNBV) for January. For investors seeking deeper insights, InvestingPro offers comprehensive analysis of Nubank’s financials, including 8+ additional exclusive ProTips and detailed valuation metrics.
The report highlighted that the banking system in Mexico usually experiences a slight contraction in deposits in January, averaging a 1% month-over-month decrease since 2013, following the increase in deposits in December due to holiday spending. This trend is contrasted by the performance of Nubank, which has shown significant growth in January, outpacing the general banking system. The analyst suggested that Nubank’s growth could be attributed to the bank’s early growth phase and strong brand recognition, evidenced by its impressive 48.7% year-over-year revenue growth and market capitalization of $57.6 billion.
Shirvaikar also pointed out that the demand for credit among banks in Mexico is traditionally weaker in January, with an average month-over-month change of 0%, compared to the historical rate of a 1% increase in December. Despite these broader banking trends, Nubank has continued to grow in both deposits and loans during this typically slower period.
The composition of Nubank’s funding was also noted in the report, with a deceleration in demand deposits and a rapid expansion in time deposits. This analysis of Nubank’s performance and the seasonal banking trends in Mexico supports Citi’s stance on the company’s stock rating and price target.
In other recent news, Nu Holdings Ltd (BVMF:ROXO34). reported fourth-quarter revenue of $2.99 billion, surpassing the consensus estimate of $2.74 billion. Despite this earnings beat, the company’s stock experienced a decline as investors focused on a contraction in net interest margins, which decreased by 70 basis points to 17.7%. The company also reported net income of $552.6 million, marking an 85% increase year-over-year on an FX-neutral basis. Nu Holdings expanded its customer base by 4.5 million in the quarter, reaching a total of 114.2 million, although its monthly activity rate slightly dipped to 83.1%. The lending portfolio more than doubled to $6.1 billion, and the credit card portfolio grew by 28% to $14.6 billion. Total (EPA:TTEF) deposits saw a significant rise, increasing by 55% year-over-year to $28.9 billion. BofA Global Research analyst Mario Perry noted the negative impact of a 13% devaluation of the Brazilian real on growth figures and maintained a Neutral rating on the stock. Nu Holdings also made notable progress in its high-income strategy in Brazil, with its Ultravioleta customer base growing by 132% year-over-year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.