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Nu Holdings now JPMorgan’s top pick among Brazilian banks By

© Reuters. Nu Holdings (NU) now JPMorgan’s top pick among Brazilian banks

JPMorgan raised Nu Holdings (NYSE:) to Overweight from Neutral with a $9 price target in a note on Monday.

JPMorgan analysts told investors that it is more confident in NU’s secular winning strategy, and they now see the recent share price correction as a good entry point.

“Our positive view is supported by: (i) proprietary client survey showing Nu has 27% principality in Brazil or 1 out of 4 Brazilians use Nu as their main bank; (ii) high principality implies market share gains for multiple years as Nubank only has 0-14% share in most products it offers today; (iii) principality also means resilient credit quality in a challenging environment,” explained the analysts.

“In addition to principality, Nubank enjoys major cost advantages vs. incumbents, meaning higher returns and better adaptability to regulatory noise in the long term, in our view,” they added.

The analysts also noted that NU had a solid 2Q with 17% ROE and stated it is now the firm’s top pick among Brazilian banks, followed by Itaú.

This story originally appeared on Investing

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