Nu Holdings (NU) Stock: The Brazilian Bank That's Catching Wall Street's Eye

TLDR

Table of Contents

Nu Holdings (NU) stock rose 1.65% to $12.34, outperforming the S&P 500’s 0.96% gain
Morgan Stanley maintains Buy rating with $18 price target based on payroll loan market potential
Company’s public payroll loans grew 50% quarter-over-quarter in Q1 2025
Analyst projects NU could capture 10% of Brazil’s payroll market by 2026
Q2 earnings expected August 14 with $0.12 EPS and $3.57 billion revenue forecast

Nu Holdings closed Tuesday’s session at $12.34, posting a 1.65% gain that topped the broader market’s performance. The stock outpaced the S&P 500’s 0.96% advance while also beating the Dow’s 0.89% rise and the Nasdaq’s 0.94% climb.

The Brazilian digital banking company has shown resilience over the past month. NU shares climbed 1.25% during this period, contrasting with the Finance sector’s 1.18% decline and the S&P 500’s modest 0.5% gain.

Morgan Stanley analyst Jorge Kuri reinforced his bullish stance on June 13. He maintained a Buy rating with an $18 price target, pointing to the company’s payroll loan market potential as a key driver.

Payroll Loans Drive Growth Story

NU’s management highlighted strong momentum in public payroll loans during the Q1 2025 earnings call. These loans surged 50% quarter-over-quarter, showing the company’s ability to gain traction in this market segment.

$NU MORGAN STANLEY REITERATES $18 PT, CALLS IT A “TOP PICK”
BIG DAY +9%
Morgan Stanley says NuBank could reach 10% payroll loan share by 2026, well above 3-4% consensus. Cites scale, distribution, and cost as key edges in Brazil’s booming payroll loan market. pic.twitter.com/qC66E9X0vv
— Samsolid (@samsolid57) June 24, 2025

The company also sees fresh opportunities in Brazil’s private payroll products. Management believes this represents untapped potential for future growth.

Kuri thinks NU could capture as much as 10% of Brazil’s payroll market by 2026. This projection assumes the company can leverage its current competitive position effectively.

The analyst noted that NU’s market share remained below 1% in the first quarter. However, he considers the typical market projections of 3% to 4% as conservative estimates that undervalue the company’s true potential.

Competitive Advantages Position NU Well

NU’s large customer base provides a foundation for expanding into new financial products. The company’s digital distribution model offers cost efficiencies compared to traditional banking approaches.

The bank’s pricing strategy also gives it an edge in attracting customers. These factors combine to create what Kuri sees as key competitive advantages for gaining market share.

Looking ahead to earnings, investors will get their next update on August 14. Analysts expect NU to report earnings per share of $0.12, matching the same quarter last year.

Revenue projections point to continued growth momentum. The consensus estimate calls for $3.57 billion in Q2 revenue, representing 25.34% growth compared to the prior year period.

Full-year forecasts remain optimistic across the board. Analysts anticipate earnings of $0.54 per share and revenue of $14.8 billion, marking increases of 20% and 28.48% respectively from 2024.

The stock currently trades at a forward P/E ratio of 22.62. This premium valuation reflects growth expectations but sits well above the industry average of 9.68.

NU’s PEG ratio of 0.7 suggests the stock may offer better value when factoring in growth prospects. The industry average PEG ratio stands at 0.96, making NU’s metric relatively attractive.

The Zacks ranking system currently assigns NU a #3 (Hold) rating. Recent analyst estimate revisions have moved slightly lower by 0.62% over the past 30 days.

NU operates in the Banks – Foreign industry, which ranks in the top 7% of all industries with a Zacks Industry Rank of 16. This favorable industry positioning supports the investment thesis for the sector overall.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: