XP Inc

XP (XP US) – Less Demanding Valuations, but the Overhang Still Weighs

Equity Bottom-Up
349 Views, 13 May 2022 23:28
EXECUTIVE SUMMARY
  • Itaú Unibanco’s acquisition of an 11.36% stake in XP in April is no strategic move; it is a contractual obligation that remained, after the regulator blocked Itaú’s acquisition plans
  • This adds to the existing overhang in XP shares, given that fellow XP shareholder Itausa deems its 11.5% XP stake to be non-strategic, having already made disposals through block trades
  • We remain cautious on XP shares based on the disposal overhang and competitive pressures in Brazilian wealth management undermining XP’s fundamentals; near term, Itausa warrants monitoring on its NAV discount
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Victor Galliano
Financials & FinTech, EM & Southern Europe
Galliano's Latin Notes
FinancialsEquity Bottom-UpThematic (Sector/Industry)

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for o... 

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