Nu Holdings arrives at its August 14 earnings release having now disappointed on two consecutive prints — and this time, options traders are considerably more defensive than before either of those misses.
The clearest shift is in options positioning. The put/call ratio jumped to 0.68 on August 13, more than three standard deviations above its 20-day average of 0.56 — the most elevated defensive reading in nearly a year, and close to the 52-week high of 0.76. That is a meaningful change from the picture described in the prior preview ten days ago, when a PCR of 0.56 and a z-score of just 0.5 pointed to near-neutral positioning. Traders have repriced their hedging demand sharply in the intervening sessions. Short interest, by contrast, has continued to ease — down almost 5% over the past week and nearly 12% over the past month to 3.7% of the float. The borrow market remains extremely loose, with availability at roughly 2,242%, meaning there are more than twenty shares available to lend for every one currently borrowed, and cost to borrow has fallen a further 17% over the week to just 0.36%. Short sellers are not crowding in; the defensiveness lives entirely in options.
The analyst picture heading into the print is genuinely split. JP Morgan raised its target to $20 in early July, maintaining an Overweight rating — a constructive signal from a bellwether firm. But that sits against a wave of downgrades in May and June: BofA cut to Underperform with a $10 target, Citi and Susquehanna both moved to Neutral and trimmed targets to $13, and UBS, while keeping its Buy rating, lowered its target to $16.90. The consensus mean target of $17.98 implies roughly 29% upside from the current $13.93, but the divergence in individual targets — from $10 to $20 — reflects genuine disagreement about the pace of Nu's margin expansion and how quickly it can translate Latin American customer growth into earnings. EPS momentum over 30 and 90 days ranks in the 81st and 86th percentiles respectively, suggesting estimate revisions have been running in the right direction; the PE multiple has compressed to 12.9x, down about half a point over the past month.
The two prior prints set a consistent template: both delivered one-day drops of roughly 4-5%, with the May print recovering over the following five sessions while the August 6 result extended losses to a 3.8% five-day decline. Brazilian-exposed peers have also struggled recently — ITUB4 and ITSA4 are both down roughly 9% on the week — reinforcing that macro and currency headwinds in Latin America are weighing on the broader regional banking complex, not just Nu specifically.
The print will test whether Nu can demonstrate the kind of margin progression that justifies the JP Morgan upgrade, or whether the BofA bear case — that capital efficiency and credit quality are deteriorating faster than the growth story warrants — is closer to the truth.
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