THE Inter (INTR) it’s the Nubank (NAKED) can enjoy a year of profits in 2023, assesses the Goldman Sachs. According to bank analysts, a greater focus on cost control and maintenance of average growth should allow both companies to follow a positive path.
“In fact, we expect INTR to present a ROE (return on equity) of 4% and the NU of 5.6%”, says the analysis team, in a report sent to clients this Monday (30).
Goldman Sachs sees long-term upside potential for ROEs as both companies have relatively unleveraged balance sheets and cost advantages over their peers. incumbent banks and “a lot of room” to gain market share.
“We expect ROEs to improve further in 2024 and we think valuations start to look attractive at 9.4 times P/E (price over earnings) for INTR and 19.8 times for NU, given the scenario of strong growth expectations for each one”, complete the analysts.
Goldman Sachs has raised Inter’s recommendation to “buy”, with a target price of US$4.20, which implies a potential appreciation of 70% over the last close. Around 2:50 pm this Tuesday (31), the company’s shares jumped 9.72% in New York.
Even so, Nubank’s shares continue to be the institution’s preference due to the competitive advantages and the “solid” user experience, in addition to a significant scale in credit cards.
The recommendation for Nubank is buy, with a target price of US$ 9.50. the role of fintech advanced 5.68%.
Why buy INTR?
Goldman Sachs listed some points that explain the house’s optimism with Inter. The bank points out:
- an increased focus on profitability, with a more prudent approach to growth and pricing, and improvements in efficiency;
- Super App, which combines banking, investment and e-commerce, as well as other services;
- credit, one of the biggest sources of profits for Brazilian banks, as a lever for growth; and
- asymmetrical risk-return, with the stock presenting a good entry point.
According to analysts, by delivering growth and maintaining asset quality at manageable levels, Inter can, in terms of profitability, close a good part of the gap that exists with the incumbents.
Why buy NU?
Regarding the preference for Nubank, Goldman Sachs mentions:
- strong user experience (the company has built one of the largest credit card operations in Brazil, with 8% of market share in credit card lending and being the third largest issuer with 12% market share TPV (total volume of payments);
- growth scenario;
- repricing of deposits;
- better efficiency; and
- valuation – the stock trades at a relative premium of 19.8 times P/E for 2024, which is more than justified on account of a CAGR (compound annual growth rate) of 142% EPS (earnings per share) for 2023 for 2026.
Source: Moneytimes
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