NEW YORK, May 22, 2026, 14:06 (EDT)
- Nu shares dropped on Friday, trailing the wider Wall Street move higher.
- BofA lowered its price target on Nubank. UBS also reduced its target but kept a positive view.
- Investors are sizing up record first-quarter profit against an increase in credit-loss allowances.
Nu Holdings shares dropped Friday, bucking the broader U.S. market’s move higher. The Brazil-based digital bank came under pressure after BofA trimmed its price target again. Investors stuck to concerns about credit costs, even as Nubank reported a record profit for the first quarter.
Nu shares dropped 2.3% to $12.86 at 1:52 p.m. EDT, moving between $12.75 and $13.26. The stock is about one-third under its 52-week high of $18.98, a steep pullback for a name still tagged as a Latin American fintech bet. Google Finance data had Brazil payments player PagSeguro down as well.
U.S. equities stayed firm, which made the move stand out. Reuters said late Friday morning that the S&P 500, Nasdaq, and Dow were all trading higher. The S&P 500 was set for an eighth weekly gain in a row and the Dow got to a new intraday record, according to .
U.S. stock markets were open Friday, but trading was on lower volume before the Memorial Day break. According to the NYSE holiday calendar, markets will be closed Monday, May 25.
BofA’s Mario Pierry lowered his target on Nubank to $16 from $17 and left his hold rating unchanged, according to TipRanks. A separate TheFly note from TipRanks reported BofA found the quarter “disappointing for a second consecutive quarter” and trimmed its 2026 and 2027 Brazilian real net profit estimates by 6% and 9%. TipRanks TipRanks
UBS analyst Thiago Batista dropped his target to $16.90 from $18.10 on May 20, TipRanks says, though he kept his buy call. That mix of cutting targets but sticking to the stock sums up much of the debate over Nu after earnings.
Nu posted strong numbers. Its May 14 SEC filing reported Q1 IFRS revenue at $4.97 billion and net income at $871.4 million. The company’s own managerial revenue number, which adjusts the accounting figure, came in at $5.32 billion.
Credit remains the soft spot. Nu reported its credit loss allowance hit $1.79 billion for the quarter. The 15-90 day NPL ratio climbed to 5.0%, tracking loans that are 15 to 90 days overdue. Loans more than 90 days behind, the 90-plus-day NPL ratio, came in at 6.5%. Risk-adjusted net interest margin dropped to 9.5% after credit-loss allowances.
Management rejected claims that its credit book was breaking down. CFO Guilherme Marques do Lago told investors that first-quarter delinquency was “consistent with that seasonal pattern” and pointed to it as proof that “pricing discipline is working well.” The Motley Fool
Nu CEO David Vélez put the focus on scale and tech for the quarter. The company reported over 135 million customers worldwide by March—more than 115 million in Brazil, over 15 million in Mexico. Vélez told investors that Nu is “rebuilding banking around AI.” Nu International
The risk is clear enough. Should Brazilian consumer credit slip, or if early delinquencies stay hot beyond typical first-quarter trends, bigger provisions could keep pressuring profit estimates. Focus could shift away from customer growth, Mexico business, or AI-based underwriting.
Nu shares are moving less on headline growth than on evidence it can keep up returns. The company needs to prove faster lending won’t mean more bad loans. With U.S. markets closed Monday, trading will be thin in the next few sessions. But that key question stays in play.
