- XP Inc. ( XP ) shares have dropped 7.9% in early Thursday trading, its third session of declines, after J.P. Morgan downgraded the Brazil-based brokerage and investment firm to Neutral from Overweight and Q2 earnings disappointed.
- J.P. Morgan points to less room for high growth with its estimated ~12% market share (and ~50% in retail brokerage), margin compression with no indication of tighter costs controls, and no plans for returning capital to shareholders in the short or medium term.
- The analyst also established December 2023 price target of $23 per share, down from YE2022 price target of $27.
- In May, the Seeking Alpha Quant rating system warned that XP ( XP ) has a high risk of performing poorly due to decelerating momentum and valuation. That contrasts with the average Wall Street rating of Buy .
- XP stock fell 13% on Wednesday after reporting lower Q2 profitability after Tuesday's close . Take a closer look at the company's quarterly financial statements here.
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XP stock extends decline after J.P. Morgan downgrades to Neutral