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Analysts at the US bank say they expect Brazil to account for 91% of revenue by 2028
With expectations of expansion in other American markets, Nubank has been expanding its operations to win more customers outside Brazil. The expectation is that operations in Mexico will become profitable in early 2025 and those in Colombia in 2026, estimated the bank Goldman Sachs in a report released to customers and the market this Thursday (11.Jul.2024).
However, Brazil will still account for 91% of revenues by 2028, analysts expect.We remain confident that Nubank can replicate some of its successful operations in Brazil.”, they reinforce. Analysts estimate a profitability measured by return on equity (ROE) of 33.1% in 2024, 37.6% in 2025 and 35.8% in 2026.
Operations in Mexico are expected to post a net loss of US$50 million in the second quarter of this year. However, with the acceleration in loan growth, which is expected to rise 52% in 2024, according to the bank’s projections, the trend is to turn a profit soon.
In Colombia, Goldman estimates a quarterly net loss of US$12 million and estimates a profit of US$1 million in 2Q26, also with growth in loans, which are expected to increase by 23% in 2024, 116% in 2025 and 75% in 2026.
“We estimate that the balance of the results will be in Brazil, although we acknowledge that this includes liquidity and equity at the share level that is not allocated to Brazil. However, we believe that this should be a good reflection of the profitability of the business in the long term, as Brazil is expected to remain its largest market for the foreseeable future.”, say analysts Tito Labarta, Tiago Binsfeld, Beatriz Abreu and Lindsey Shema.
For the 2nd quarter, the bank projects net income of US$ 425 million for the fintech as a whole, above the US$ 379 million recorded in the first three months of the year, with ROE increasing 110 basis points in the quarter, reaching the level of 24.1%.
Goldman Sachs has a buy recommendation for Nubank shares, with a target price of US$ 17, a potential upside of 28.7% compared to the time the report was released.
With information from Investing Brasil.
Source: https://www.poder360.com.br/poder-economia/nubank-deve-ser-lucrativo-em-2025-e-2026-apos-expansao-diz-goldman/