Nu Holdings Stock Upgraded to Buy, as Price Target Doubled

Nu Holdings stock (NYSE:NU) has been moving higher today, as a note from Citi came with a rare double-upgrade, and a huge ump in price target.

The firm revised its rating on the stock from “Sell” to “Buy,” concurrently boosting the price target from $9 to $18, signaling a dramatic shift in perspective on the stock.

The upgrade sent positive signals through the market this morning, with gains of 0.99% at the time of writing.

Citi's rationale behind the upgrade centers on Nu Holdings' demonstrated resilience and growth potential within the challenging macroeconomic landscapes of Brazil, Mexico, and Colombia. The firm highlighted Nu's ability to not only navigate these complexities but also to accelerate growth in key portfolios while maintaining strong asset quality.

Another aspect that has seen the firm flip bullish is the expectation of accelerated earnings momentum. This projection is fueled by favorable dynamics within Brazil and increasing total payment volume (TPV). Furthermore, Citi anticipates tailwinds from the company's expansion into Mexico and Colombia, which are expected to contribute significantly to future earnings. Efficiency gains are also playing a crucial role in boosting Nu's return-on-equity.

NU Holdings had already been in a bullish phase this year, with gains of 24.8% YTD reflecting a period of outperformance. Despite this, the $13.50 resistance level has proved a tough nut to crack. This newly minted price target, and a flip from sell to buy could be a catalyst that helps bulls push on.