Citi Upgrades Nu Holdings to Buy, Sees Potential Earnings Acceleration

Citi upgraded Nu Holdings (NU) to Buy from Sell with a price target of $18, up from $9. The firm sees recent quarters as a testament to the bank's ability to navigate well and accelerate in key portfolios while maintaining good asset quality. Citi believes Nu's earnings momentum could accelerate due to Brazil and TPV dynamics, as well as tailwinds from Mexico and Colombia and efficiency aiding return-on-equity.

Citi has upgraded Nu Holdings (NU) to a "Buy" rating from "Sell," with a new price target of $18, up from $9. The firm's analysts attribute this upgrade to Nu's strong performance in recent quarters, highlighting its ability to navigate economic challenges and accelerate growth in key portfolios while maintaining good asset quality. The upgrade reflects Citi's optimism about Nu's earnings momentum, driven by positive trends in Brazil and TPV dynamics, as well as tailwinds from Mexico and Colombia, and efficiency gains aiding return-on-equity.

Nu Holdings is set to release its Q2 2025 earnings on August 14th. Analysts predict EPS of $0.14 and revenue of $3.67 billion. The EPS forecasts have been adjusted higher twice, while revenue expectations have been revised upwards three times, indicating increasing optimism among analysts [1]. The one-year price target is $14.14, suggesting an average target of a 14.29% upside from the current stock price of $12.37. The consensus recommendation is 2.5, categorizing the stock as "Outperform." The projected GF Value of $29.18 indicates a 135.89% upside potential [2].

Analysts expect Nu Holdings to report strong year-over-year growth, with earnings expected to increase by 8.3% and revenues by 28.3%. The company's digital-first, scalable business model has positioned it as a leader in the Latin American fintech landscape [1]. The primary focus for investors will be on customer growth and engagement, with Nu Holdings already surpassing 118 million customers across Brazil, Mexico, and Colombia. Additionally, credit quality and management's outlook on the Latin American economy and new product rollouts will be key factors influencing the stock's performance [2].

Nu Holdings' stock has recently experienced a surge, rising 1.55% on August 7, 2025, with a trading volume of $0.43 billion, ranking 272nd in market activity. The stock's forward P/E of 22.35 exceeds the finance sector's average of 10.13, while its PEG ratio of 0.69 suggests earnings growth outpaces valuation [3].

Despite the elevated forward P/E, Nu Holdings' high-volume strategy has yielded strong returns, with a backtest showing a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53% [3]. As Nu Holdings prepares to release its Q2 earnings, investors will closely monitor the company's ability to deliver on expectations, with a strong print likely to reaffirm its long-term growth story and potentially boost the stock's valuation.

References:
[1] https://www.ainvest.com/news/nu-holdings-set-release-q2-earnings-analysts-predict-eps-0-14-revenue-3-67-billion-2508/
[2] https://www.ainvest.com/news/nu-holdings-q2-revenue-surpasses-expectations-strong-customer-growth-purchase-volume-2508/
[3] https://www.ainvest.com/news/nu-holdings-pioneering-embedded-finance-revolution-latin-america-untapped-markets-2508/