Nu Holdings, the Brazil-based digital banking group, saw its shares rise in premarket trading on Wednesday after a significant endorsement from Citi.
The investment bank upgraded the company’s stock to a “buy” from a prior “sell” rating, while also doubling its price target to $18 from $9.
The new target implies more than 37% upside from Tuesday’s close.
The move underscores Citi’s view that Nu Holdings is navigating a complex macroeconomic environment more effectively than expected, while maintaining strong momentum in its core businesses and expanding internationally.
Earnings momentum and key growth drivers
Citi analyst Gustavo Schroden highlighted the company’s performance in recent quarters as evidence of its resilience.
Despite concerns surrounding Brazil’s macroeconomic backdrop, Nu Holdings has not only managed the environment effectively but also accelerated its growth in critical portfolios.
According to Schroden, earnings momentum is expected to strengthen further, underpinned by Brazil’s economic dynamics and a rise in total payment volumes.
The company is also positioned to benefit from tailwinds in Mexico and Colombia, while efficiency improvements should support higher returns on equity (ROE).
Nu Holdings’ strategy of sustaining strong credit origination—particularly in interest-earning products and credit cards—has been central to this trajectory. Schroden noted that asset quality remains “under control,” reinforcing confidence in the sustainability of this growth path.
Mexico expansion and cross-selling opportunities
Mexico has emerged as a key growth driver for the digital bank. Schroden pointed to solid progress in deposits and loans in the market, with the low loan-to-deposit ratio signalling room to increase leverage over time.
This suggests further potential upside for earnings as Nu Holdings builds scale in the country.
Citi also highlighted the importance of growing total payment volumes, which could enhance cross-selling opportunities across the company’s suite of products.
With a large and expanding customer base, Nu Holdings is well-positioned to introduce new services and deepen relationships with existing clients.
The combination of geographic diversification, rising transaction activity, and product expansion offers multiple levers for future growth beyond the company’s home market in Brazil.
Analyst sentiment and share performance
Citi’s upgrade places it closer in line with the broader analyst community, where the majority remain bullish on Nu Holdings.
Data from LSEG shows that 10 of the 17 analysts covering the company currently rate it as a strong buy or buy, while five have a neutral stance with hold ratings.
Investors have also responded positively to the company’s progress.
Shares of Nu Holdings have risen more than 26% so far in 2025—nearly three times the performance of the S&P 500 over the same period.
Following Citi’s revised outlook, the stock climbed about 1.87% in premarket trading on Wednesday, underscoring market enthusiasm around the bank’s growth trajectory.
While macroeconomic risks remain a factor, Citi’s double upgrade reflects growing confidence that Nu Holdings can continue delivering solid earnings growth, maintain credit quality, and benefit from expanding operations in Mexico and Colombia.
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