Citi upgrades Inter & Co (INTR), expects strong earnings growth on improved NII performance
- Wall St set for higher open on peak interest rate bets
- JPMorgan sees 8% downside risk for S&P 500 next year
- Salesforce shares jump premarket after cloud software firm lifts annual guidance
- Fed's preferred inflation gauge slows to 3.0% annually in October
- Stocks on cruise control as rate cut expectations boost outlook
Citi upgraded Inter & Co Inc (NASDAQ: INTR) to a Buy rating (From: Neutral) and increased their 12-month price target on the stock to $5.30 (From $2.00) as the digital finance platform signals its intention to reach a higher ROE via the repricing of its credit portfolio and keeping expenses under control.
Analyst, Rafael Frade wrote in a note, “We believe that 2Q23 results show good advances in this direction, with potential further improvements in NIM coming from new initiatives and lower rates, while cost-of-risk could present material improvement from higher restrictions on credit card origination.”
Frade is optimistic about the ongoing enhancement of Net Interest Income (NII) for several reasons. Firstly, there are incremental origination rates in payroll loans that surpass the recently recorded high rates of approximately 20% per annum. Additionally, the optimization of demand deposits is expected to align seamlessly with loyalty programs like "Conta com Pontos." Moreover, the bank's net liability sensitivity is poised to assist NII by reducing funding expenses as the easing cycle progresses.
Citi fully updated their numbers, raising income estimates by 9% and 29% for 2023 and 2024. Net interest income (NII) estimates were also revised upwards 4% and 11% for 2023/24.
“All in all, we expect INTR’s earnings power to improve due to significant improvements in NII,” Added Frade.
Shares of INTR are up 2.53% in afternoon trading on Wednesday.
By Michael Elkins | [email protected]
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- nCino, Inc. (NCNO) shares fall as guidance disappoints
- Celestica (CLS:CN) (CLS) PT Raised to $33 at RBC Capital
- Jefferies upgrades 2 social media stocks on positive 2024 catalysts
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Hot List
Related EntitiesCiti, Earnings, Michael Elkins
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!