Nu in talks to buy Monzo in £8B-£10B deal - report

Rothschild Redburn maintained a Buy rating on Nu Holdings (NYSE:NU) stock, with a $19.00 price target after Monzo deal speculation. This represents a significant upside from the current price of $13.59, with analysts setting a consensus price target range of $12 to $23. NU's impressive revenue growth of 44% over the last twelve months, and its P/E ratio of 18.44, highlight its potential.

The firm believes a potential acquisition of Monzo would be Nubank's most ambitious move yet, propelling it from a Latin American disruptor to a global financial platform. Monzo, valued at around £10 billion, boasts higher earnings multiples than Nubank. Acquiring Monzo would grant Nubank an immediate European foothold via a profitable, product-rich franchise with approximately 15 million customers, roughly 70% of whom are active.

Monzo offers an established license, trusted consumer brand, and a diversified revenue base with significant monetization potential. Rothschild Redburn outlined its thoughts on the hypothetical transaction in a note to clients. Nu Holdings also reported significant financial achievements, with net income rising to $1.1 billion and gross revenue increasing by 39% to $5.9 billion in its second-quarter results.