Nu Holdings upgraded to strong buy with 26% upside on Brazil debt relief boost

Nu Holdings has been upgraded to a strong buy ahead of its Q2 2026 earnings, citing the best entry point since April 2024. The upgrade is driven by Brazil's consumer debt relief program, Desenrola 2.0, where Nu leads 40% of renegotiated debt volume. Expected benefits include a 40-50 basis point improvement in non-performing loans, a 70 basis point quarter-on-quarter increase in net interest margin, and the potential to unlock $18 million in provisions. The stock is valued attractively at 15 times forward earnings with a potential 26% upside to 19 times, supported by strong medium-term growth catalysts and a margin of safety.