Weekly Recap | XP +6.26%, earnings edge past estimates

The Week

XP shares rallied 6.26% this week, closing at $16.81, while the S&P 500 shed 1.43% — a relative outperformance of roughly 7.69 percentage points. The week opened with a dip to $15.46 on Monday before buyers stepped in, sending the stock to $15.70 by the close. Sentiment firmed up through Tuesday and Wednesday, with the stock reaching $16.53 on Wednesday. A brief pullback on Thursday took it back to $15.99, but Friday saw a strong rebound: the stock touched an intraday high of $16.98, just shy of the late-July record of $17.45, before settling at $16.81.

Key Events

The week’s centrepiece was the release of XP’s fiscal second-quarter 2026 results before Tuesday’s open. Net income rose 5% year-on-year to R$1.38 billion, while revenue climbed 8% to R$5.06 billion. Non-GAAP earnings came in at R$2.67 per share on R$4.88 billion in revenue, slightly ahead of the IBES consensus estimate of R$1.37 billion in adjusted profit. Management attributed the top-line growth to strength in equities and the funds platform, with total client assets reaching R$2.2 trillion.

In a separate filing, the company announced the cancellation of roughly 11.8 million Class A treasury shares, trimming the share count by around 2.3%. On the earnings call, XP also flagged a US banking operation as a likely near-term strategic move. Late in the week, Handelsbanken Fonder AB disclosed a reduction in its XP position — a routine portfolio adjustment that had little market impact.

Analyst Ratings

Coverage remains thin, with a single analyst rating the stock at Overweight. The consensus recommendation is a Buy, and the consensus target price of $21.86 implies roughly 30% upside from the latest close of $16.81. The target range spans from $18.86 to $23.82, reflecting a wide spread in views on the longer-term US expansion narrative. XP ranks 32nd out of 32 companies in the investment banking and brokerage industry.

The Week Ahead

On the macro front, Tuesday 25 August brings a busy slate of US data: FHFA and Case-Shiller home-price indices, the Conference Board consumer confidence reading, and new-home sales. Housing data will offer fresh clues on how the rate environment is feeding through to asset prices, while the confidence gauge will shed light on household sentiment. None of these are directly tied to XP, but they could shape the broader risk mood that the stock trades within.

In Short

XP delivered a modest earnings beat this week, and its client-asset base held steady at R$2.2 trillion — a signal of underlying resilience. The sole analyst rating points to meaningful upside from current levels, though thin coverage means the consensus is more a single view than a market-wide read. On the valuation side, the stock trades at roughly 8.75x earnings, near the low end of its recent range. The latest session’s flow showed net buying from retail-sized orders against net selling from large-lot trades, suggesting a near-term tug-of-war. Whether the coming macro data and valuation support can align will be the key thread to watch.

This article is generated by LongbridgeAI from market data, for information only and not investment advice.