Citi and Susquehanna have both downgraded Nu Holdings Ltd. to Neutral and cut their price targets from $18 to $13, citing concerns that the Brazilian digital bank's credit-driven growth will pressure monetization and profitability. Citi flagged the company's exposure to credit cards and personal loans as increasing its vulnerability to a crowding-out effect on borrowers' repayment capacity. Susquehanna noted that first-quarter operating margins fell 760 basis points to 19.2% amid a credit card push in Brazil and expansion in Mexico, and warned that Nu is entering another heightened investment cycle that will weigh on shares until the outlook becomes clearer. The firm also highlighted a leadership restructuring, with the departure of Brazil-based CFO Guilherme Lago and the hiring of Visa's North America CEO Rob Livingston, which is expected to accelerate global expansion.
Nu Holdings LtdCiti and Susquehanna downgraded Nu Holdings to Neutral and cut price targets from $18 to $13, citing credit-driven growth pressure on profitability and a heightened investment cycle.