Nu Holdings stock climbs after initiated at Goldman Sachs with Buy
Seeking Alpha2022-01-03
- Brazil-based financial services platform Nu Holdings'(NYSE:NU)stock rises more than3%in pre-market trading after Goldman Sachs analyst Michael Ng initiates the fintech with a Buy rating.
- As the company expands its loan portfolio in high yielding products, "it's well positioned to increase profitability significantly beginning in 2023, and we see it reaching an ROE of 39% by 2025," the analyst writes in a note to clients.
- Despite macro risks rising in Brazil, the company's proprietary technology platform and relatively low market share can allow it to grow in a counter-cyclical trends, Ng notes.
- Additionally, UBS analyst Thiago Batista also initiates Nu Holdings (NU) with a Buy rating on the company's continued expansion of its strong client base, as well as an implementation of new products, he writes in a note to clients.
- Batista forecasts the company's client base to be 100M in 2026, with the majority based in Brazil.
- Applies a $12.50 price target, implying 33.3% upside from Friday's close; derived from a price/book value 2026 estimate of 4.5x.
- The Buy ratings diverge from the NeutralWall Street Analyst Rating.
- Still, shares of NU are trading about 10% below its initial public offering price of $9 per share on Dec. 9 of 2021.
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