Nu Holdings Ltd. (NU) shares entered the Juneteenth holiday weekend at $12.71, down 1.5% on Thursday, even as broader markets rose. The stock managed a 4% weekly gain after a turbulent start to June, when analyst downgrades and a management shakeup pushed shares near a 52-week low.
Analyst Downgrades Highlight Risks
Recent downgrades from Citi, Susquehanna, and BofA have kept investor attention on rising loan-loss provisions, a CFO transition, and Brazil credit risk. Citi cut Nu to Neutral from Buy with a $13 price target, while Susquehanna moved to Neutral with a $13 target. BofA Securities went further, cutting the stock to Underperform with a $10 target, citing the CFO handover as an added uncertainty amid a tougher credit backdrop in Brazil.
Buyback and Growth Story
Nu's management has pushed back with a $1 billion share repurchase program approved on June 4, underscoring capital discipline. The company also reported record first-quarter revenue exceeding $5 billion, with net income up 41% to $871 million. However, credit loss allowances rose 33% from the prior quarter to $1.79 billion, and the risk-adjusted net interest margin fell to 9.5%.
CFO Transition and Strategy
Rob Livingston, formerly Visa's CFO for North America, will replace Guilherme Lago as Nu's CFO on July 13. Lago will stay on as a special adviser through August. Founder and CEO David Velez expressed confidence in Livingston, emphasizing that Nu's priorities and operating model remain unchanged.
Market Context and Outlook
Nu now serves 135 million customers across Brazil, Mexico, and Colombia, competing with traditional lenders like Itaú Unibanco. Management argues that its technology-driven underwriting can offset credit risk, but BofA has flagged the CFO transition as an added uncertainty. When trading resumes, the $13 level will be a key test of investor confidence, with Citi and Susquehanna targets near that level and BofA lower at $10.
