Nu Holdings shares traded higher after the company rolled out a $1 billion buyback. Some analysts are still cautious.
Nu Holdings Ltd. shares climbed Thursday midday. The move followed news that the Nubank parent signed off on a $1 billion buyback. The news comes after several analyst downgrades and fresh concerns about the company’s CFO switch.
The stock traded at $12.11, up 4.0%, near midday in New York. Shares ranged from $11.59 to $12.21 in morning action. That beat the SPY, which added 0.1%. QQQ fell 0.8%. The move seemed tied to the stock rather than the market overall.
Nu’s buyback focuses on timing. Buying back shares spends cash and can push up earnings per share, which can be a signal managers see the stock as cheap. But that doesn’t solve Nu’s larger problems. Credit growth is still uncertain. Brazil’s future and whether Nu can expand outside Latin America are also unresolved. Results will depend on how those play out.
Nu’s board has signed off on a stock buyback plan for up to $1 billion in Class A ordinary shares, the company said in a filing. The program is scheduled to run from June 4, 2026 to June 3, 2027. Shares may be repurchased on the open market, via derivatives, or in negotiated deals. There is no minimum buyback, and Nu can change or halt the program at any time.
Nu plans to use cash from retained and future earnings to pay for the buybacks. In another statement, the company said it still has enough capital buffers to cover spending in Brazil, Mexico, Colombia, and the U.S.
Nu plans to repurchase shares, the company said, just a few days after naming Rob Livingston as CFO. Livingston, who used to be the finance chief at Visa North America, will take the role July 13. Outgoing CFO Guilherme Lago will stay on as special adviser until Aug. 31. CEO David Velez called Livingston “the right person” to handle the finance team. Nu International
BofA Securities’ Mario Pierry downgraded Nu to Underperform from Neutral and dropped the price target on the stock to $10 from $16 after the CFO transition. Pierry said Lago was important in front of the market. He flagged the timing of the CFO change as an “uncertainty” for Nu, which is navigating a tougher credit backdrop in Brazil and working to grow in Mexico, Colombia and the U.S. Investing.com
Nu slipped to Neutral from Positive at Susquehanna, with analyst James Friedman cutting his target to $13 from $18. Friedman flagged “deteriorating operating margins” ahead of an “anticipated investment cycle.” He said Nu’s operating margin in Q1 fell 760 basis points to 19.2%. Investing.com
Nu posted record revenue above $5 billion last quarter as net income reached $871 million and return on equity was 29%. Credit-loss allowances jumped 33% from the previous quarter to $1.79 billion. The risk-adjusted net interest margin slipped to 9.5% from 10.5%. Bulls and bears both found something in the results.
Peer trading stayed quiet. Itaú Unibanco’s U.S. shares edged up 1.4%, while Santander Brasil added 1.1%. Nu outperformed both major Brazilian banks. Investors kept focusing on Nubank’s digital strategy as they weighed it against traditional players with deeper credit histories.
Nu’s buyback plan is still risky. Higher credit costs in Brazil, the CEO switch to Livingston that rattled some investors, or more spending in the U.S. and Mexico could all make Nu hold onto its cash rather than complete the buyback. The plan just approves the repurchase, but it isn’t a firm commitment.
Nu shares are trading higher. CFO risk is in the news, but now it’s about confidence in Nu’s cash for both growth and buybacks. Investors are weighing if the company can cover both.
