Jefferies Initiates XP Inc (XP) With a Buy

XP Inc. (NASDAQ:XP) is one of the Most Undervalued Foreign Stocks to Buy According to Analysts. On January 20, Jefferies initiated coverage of XP Inc. (NASDAQ:XP) with a Buy rating and a $22 price target. Earlier, on December 16, Thiago Batista from UBS also reiterated a Buy rating on the stock and raised the price target from $23 to $25.

Analysts at Jefferies noted that the stock’s positive outlook is based on XP Inc.’s strong competitive position in the Brazilian market. The firm noted that XP operates through its multi-brand ecosystem, which allows investors to access digital platforms along with personalized advisory services.

The investment bank views XP Inc. as a broker that is democratizing investments in Brazil through its multi-brand ecosystem that combines a digital platform with personalized advisory services. Jefferies noted that some key strengths of the bank include its 26% return on equity, a solid CET1 capital ratio of about 18.5%, and its control over distribution, where roughly 50% of Brazil’s independent financial advisors partner with XP.

The firm also finds the company to be attractively placed due to its cheap valuation, particularly due to peak interest rates. Jefferies identifies XP as among the top gainers from rate cuts. The firm expects 15% CAGR in revenue and earnings through 2030, with ROE rising from 24% in 2025 to 28% by 2030.

XP Inc. (NASDAQ:XP) is a technology-enabled platform offering a range of investment, credit, and pension products at low fees. They deliver wealth management, investment funds, and private pension services, covering diverse asset classes including equities, fixed income, and alternatives across both public and private markets.

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Disclosure: None. This article is originally published at Insider Monkey.