SÃO PAULO – Nu Holdings Ltd. (NYSE:NU) saw its stock price rise nearly 1.8% on Tuesday, reaching $13.36, as investors responded positively to the company’s recently announced $1 billion share repurchase program. The gain outpaced the broader market, including the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), the Financial Select Sector SPDR Fund (NYSEARCA:XLF), and the iShares MSCI Brazil ETF (NYSEARCA:EWZ).
The buyback, which represents about 1.6% of Nu’s current market capitalization of roughly $63.9 billion, was approved by the board on June 4 and allows for the repurchase of up to 74.9 million Class A shares over the next year. While the program is not binding, analysts view it as a strong signal of management’s confidence in the company’s financial health and future prospects.
Market Performance and Context
Nu shares traded between $12.94 and $13.39 on Tuesday, with approximately 45.6 million shares changing hands. The stock closed near its session high, reflecting robust demand. In comparison, the S&P 500 rose 0.79%, the Nasdaq climbed 1.52%, and the Dow edged up 0.26%, according to Reuters. Financial sector gains were modest, with the XLF slipping 0.2%, while the EWZ also declined 0.2%.
The buyback’s relatively small size—1.6% of market cap—suggests the move is more about signaling capital allocation priorities than reducing share count significantly. Nu’s first-quarter net profit of $871 million underscores the program’s feasibility, as the buyback amount is just 1.15 times quarterly earnings.
Credit Growth and Risks
Nu’s credit portfolio expanded 40% year-over-year to $37.2 billion in Q1, while deposits grew 22% to $42.4 billion. The loan-to-deposit ratio increased to 58.3% from 49.1% in the previous quarter. However, early-stage non-performing loans (15-90 days) rose 89 basis points from Q4 to 5.0%, indicating rising credit risk. Loans overdue 90-plus days improved slightly, dropping 10 basis points to 6.5%.
“Credit growth stayed strong in Q1, but early delinquencies also went up. This is the key issue for the stock heading into Q2 results,” noted a market analyst. The company continues to expand in Brazil, Mexico, and Colombia, adding to its credit exposure.
Leadership Transition and Analyst Outlook
Nu is set to undergo a CFO transition, with Rob Livingston, formerly of Visa Inc. (NYSE:V), taking over on July 13. He replaces Guilherme Lago, who will serve as a special adviser until August 31. Livingston has emphasized “optimizing capital allocation,” a focus that aligns with the buyback and loan portfolio expansion.
Analyst sentiment remains mixed but leans positive. Benzinga’s consensus rating is Buy, with an average price target of $14.73, slightly above Tuesday’s close. Needham issued a $17 target on June 26, while Citigroup and Susquehanna are among firms providing recent updates.
Nu reported Q1 revenue exceeding $5 billion for the first time, with net income of $871 million and a return on equity of 29%. Founder and CEO David Vélez described the quarter as “another strong quarter.” The stock’s ability to sustain gains will depend on managing credit quality while capitalizing on growth opportunities.
