NEWS:
JPMorgan Names Nu Holdings as Top Pick Among Brazilian Banks
Summary:
JPMorgan has upgraded its rating for Nu Holdings from “Neutral” to “Overweight,” setting a $9 price target. The firm cites Nu’s strong market position in Brazil, high returns, and adaptability as key reasons for the positive outlook.
JPMorgan’s New Rating and Price Target
Upgrade to ‘Overweight’: JPMorgan has raised its rating for Nu Holdings from “Neutral” to “Overweight.”
$9 Price Target: A price target of $9 has been set for the stock.
Rationale Behind The Upgrade
Strong Market Share: A proprietary survey indicates that 1 out of 4 Brazilians use Nu as their primary bank, leading to a 27% “principality” or core customer base.
Potential for Market Share Gains: The high level of principality implies that Nu Holdings is well-positioned for market share gains, especially as it currently only holds a 0-14% share in most of its product offerings.
Credit Resilience: The high principality also indicates strong credit quality, even in challenging market conditions.
Competitive Advantages
Cost Benefits: Nu Holdings has significant cost advantages compared to traditional banks, translating to higher returns and adaptability to regulatory changes.
Financial Performance
Solid Second Quarter: Nu Holdings had a strong second quarter with a 17% Return on Equity (ROE).
Comparison with Other Banks
Top Pick: JPMorgan now considers Nu Holdings its top pick among Brazilian banks, followed by Itaú.
Final Thoughts:
JPMorgan’s upgraded outlook for Nu Holdings underscores the bank’s strong market position and adaptability in Brazil. With solid financial performance and inherent competitive advantages, Nu Holdings stands out as a compelling investment opportunity, according to JPMorgan.
TECHNICAL ANALYSIS:
Today NU formed a bullish RSI bounce (50 RSI levels, which is very bullish). This bounce also occurred on the EMA ribbon, which is another bullish sign.
Sell Targets:
(1) Sell zone between $7.95 and $8.12
(2) Slightly above the Bollinger Band as the next price target if NU climbs above $8.12.
TradingView Chart:
https://www.tradingview.com/chart/NU/gmPYBttc-NU-Holdings-NU-Rises-8-from-JPMorgan-Upgrade-Bullish-Targets/
