BofA Securities has moved Nubank to an "underperform" rating from "neutral," reducing its price target to $10 from $16 after the digital bank disclosed that Chief Financial Officer Guilherme Lago will step down effective July 13. The downgrade and target cut follow a string of senior leadership departures that the broker said are becoming "harder to ignore."
CFO transition and leadership context
Lago, who joined the company in 2019 and carried the CFO title since 2021, will remain with Nubank in a Special Advisor capacity through the end of August. The bank named Rob Livingston as his successor. Livingston most recently served as CFO for North America at Visa and brings more than 30 years of experience in financial services.
BofA analysts emphasized Lago's prominence inside the company, calling him "one of the company’s most important executives, overseeing its IPO and helping shape Nu’s financial discipline during a period of rapid growth and rising profitability," and describing him as "the key market-facing executive and a central figure in communication with shareholders." The broker said Lago's exit follows the departures of several other senior executives over the last two years - President and COO Youssef Lahrech, Chief Product Officer Jag Duggal, Chief Technology Officer Vitor Olivier and Chief Credit Officer Ravi Prakash - moves that, in BofA's view, "increase uncertainty around execution and management depth."
Valuation and model changes
Alongside the rating shift, BofA revised the multiple it applies to Nubank's projected 2026 earnings per share, lowering the target price-to-earnings multiple to 13x from 18x previously. That multiple is described by the broker as two standard deviations below Nubank's two-year average, a change the analysts attribute to "rising execution and strategic risks." BofA's 2026 EPS estimate stands at $0.89, compared with Bloomberg consensus of $0.86 and Visible Alpha consensus of $0.88.
Key financial projections
- BofA expects Nubank's net interest income to increase to $15.33 billion in 2026 from $9.55 billion in 2025.
- Provisions expense is forecast to rise 80.9% to $8.04 billion, representing a provisioning burden equal to 57.2% of pre-provision profit, up from 50.4% in 2025.
- Total gross customer loans are projected to grow to $42.79 billion from $27.69 billion, with the loan-to-deposit ratio climbing to 76.5% from 66%.
- Return on tangible equity is expected to decrease to 26.4% in 2026 from 27.1% in 2025, continuing a decline from 28.9% in 2024.
- Revenue growth is modeled at 58.2% for 2026 while operating expense growth is forecast at 54.8%, narrowing operating leverage to 3.4 percentage points from 20.2 percentage points in 2025.
Analysts' concerns and strategic factors
Beyond turnover in the executive ranks, BofA cited several factors behind the downgrade: deteriorating asset quality indicators, pressure on risk-adjusted net interest margins, and lower earnings visibility. The broker also flagged Nubank's expansion efforts into Mexico, Colombia and the United States - together with its pending application for a U.S. national bank charter - as elements that contribute to heightened strategic risk.
Implications
The broker's actions reflect both near-term governance and execution questions and broader uncertainty around the company's ability to sustain prior margins and earnings momentum as it scales geographically. The combination of a reduced valuation multiple and downward pressure on several profitability metrics underlines BofA's more cautious stance.
Investors monitoring Nubank will likely focus on how the incoming CFO integrates with the leadership team, how the company manages asset quality and provisioning as loan balances expand, and whether the bank's international growth plans and charter application proceed without adding material execution risk.
Note: All projections, estimates, and analyst characterizations cited above are those reported by BofA Securities.