Shares of Brazilian fintech companies fell by up to 8.6% over the week — The Rio Times
In Brazil, shares of six out of seven fintech companies traded in New York declined between September 14 and 18. The biggest drop was recorded by PicPay, down 8.57% to $9.28 per share. Nubank lost 4.55%, PagBank 7.12%, Agibank 5.72%, Stone 3.93%, and Inter 2.55%.
As The Rio Times reports, XP Inc. was the exception, with its shares rising 4% from the opening price on Monday. By the end of the week, XP shares were worth $20.01, or $0.77 more than at the beginning of the period.
Revision of Nubank's rating
On September 16, Itaú BBA downgraded its recommendation for Nubank from outperform to market perform and cut its New York share price target to $18 by the end of 2027, compared with the previous $20. The bank explained the decision by expectations of slower growth in the company's profit in 2027, more difficult conditions for Brazilian consumers, and possible restrictions on expensive consumer loans.
Itaú BBA reduced its own forecast for Nubank's 2027 profit by 8%. At the same time, the bank called the company a long-term winner. According to Finsiders Brasil, before the decline on the day of the rating revision, Nubank shares had already lost 1.44% on Monday and 1.53% on Tuesday.
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Impact of central bank decisions
On the same day, the U.S. Federal Reserve raised the target range for the federal funds rate by 0.25 percentage points, to 3.75–4%. All 12 voting members supported the decision. At the same time, the Copom committee of Brazil's Central Bank lowered the benchmark Selic rate by 0.25 percentage points, to 13.75%.
Finsiders Brasil linked the sell-off in fintech-sector shares to declining investor interest in growth-company stocks amid higher rates, as well as rising funding costs. XP's situation differed because of its business structure: the company earns revenue from brokerage services, capital markets, asset management, and work with large clients, rather than predominantly from consumer lending.
Brazil's Ibovespa stock index declined 1.06% over the week to 185,229.17 points, ending a four-week streak of gains.
