Nu Holdings Ltd. (NYSE:NU) saw its share price climb 3.3% over the four-session U.S. trading week ending July 2, closing at $13.61. The advance came during a holiday-shortened period, with U.S. markets closed on July 3 for Independence Day.
The stock's rise has altered the math behind the company's $1 billion share repurchase program. At the current closing price, the buyback would cover approximately 73.5 million shares, down from 83.5 million shares at the June 5 close. This reduction in theoretical buying power highlights the double-edged nature of stock price appreciation for buyback programs.
Market Performance and Volume
Nu outperformed key benchmarks during the period, topping the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which rose 2.2%, and the SPDR S&P Bank ETF (NYSEARCA:KBE), which added just 0.3%. Trading activity intensified, with 126.6 million shares changing hands in the final two sessions, accounting for 61% of the total volume over the four-day stretch.
The buyback, announced on June 4, allows Nu to repurchase up to $1.0 billion in Class A ordinary shares over 12 months, without a fixed share target. With a market capitalization of $65.1 billion, the program represents about 1.5% of the company.
Analyst Downgrades and Credit Quality
The recent price gains come despite analyst downgrades. BofA Securities cut Nu to Underperform from Neutral on June 2, slashing its price target to $10 from $16. Susquehanna followed on June 3, downgrading to Neutral from Positive and lowering its target to $13 from $18, citing margin pressure and an investment cycle. NU's close above Susquehanna's new target suggests some market optimism.
Credit quality remains a key concern. Early-stage 15-90 day non-performing loans rose 89 basis points to 5.0% in the first quarter, though Nu attributes this to typical Q1 seasonality. Longer-term 90+ day NPLs improved, falling 10 basis points to 6.5%. CEO David Vélez described the first quarter as "another strong quarter," with revenue exceeding $5 billion, net income of $871 million, and a return on equity of 29%.
CFO Transition Ahead
Investors are also preparing for a leadership change. On July 13, Rob Livingston will assume the role of CFO, replacing Guilherme Lago, who moves to a special adviser position. Livingston, a former executive at Visa Inc. (NYSE:V) and Capital One Financial Corp. (NYSE:COF), was chosen as "the right person to lead the team through what comes next," according to Vélez.
NYSE strategists Michael P. Reinking and Eric Criscuolo noted that the week saw "wild rotational activity" in markets, with upcoming U.S. macro data including ISM Services and FOMC minutes. Nu's next earnings report will be closely watched for updates on buyback execution and credit trends.
