New Analyst Forecast: $XP Given 'Buy' Rating

UBS initiated a 'Buy' rating on XP stock, adding to the two existing buy ratings from analysts in recent months, with no sell ratings reported. Institutional investor activity in Q1 2025 reveals a mixed sentiment, as MAWER INVESTMENT MANAGEMENT LTD. reduced its position by 33.0% (12,090,798 shares), while CAPITAL WORLD INVESTORS increased its stake by 35.6% (10,421,768 shares).

Analysis

Recent analyst sentiment for XP Inc. ($XP) appears constructive, highlighted by UBS initiating a 'Buy' rating on June 10, 2025, and Morgan Stanley issuing an 'Overweight' rating on May 13, 2025. These contribute to a tally of two buy ratings and no sell ratings from Wall Street firms in recent months, suggesting a positive outlook from the sell-side. However, institutional investor activity in Q1 2025 presents a more nuanced picture. While 183 institutional investors increased their holdings in $XP, 170 reduced their positions, indicating divergent views among large capital allocators. Notably, MAWER INVESTMENT MANAGEMENT LTD. significantly cut its stake by 12.1 million shares (-33.0%), valued at approximately $166.2 million. SANDS CAPITAL MANAGEMENT, LLC entirely divested its position, selling 4.86 million shares (a 100.0% reduction) worth around $66.9 million. Other substantial reductions came from FMR LLC (-4.83 million shares, -60.1%), VANGUARD GROUP INC (-4.39 million shares, -45.5%), and BLACKROCK, INC. (-4.11 million shares, -9.1%). Conversely, CAPITAL WORLD INVESTORS demonstrated strong conviction by adding 10.42 million shares (+35.6%), an investment of roughly $143.3 million, and JENNISON ASSOCIATES LLC established or significantly increased its holding by 2.87 million shares, valued at $39.5 million. This mixed institutional flow, with significant divestitures by some prominent managers contrasted by substantial new investments from others, suggests a period of portfolio rebalancing and differing opinions on $XP's valuation or prospects, despite the bullish analyst ratings.

Key Decisions for Investors

• Investors should acknowledge the positive signal from recent 'Buy' and 'Overweight' analyst ratings on $XP, which indicate favorable sell-side sentiment.
• Careful consideration should be given to the mixed institutional ownership changes in Q1 2025, particularly the substantial divestments by firms like MAWER INVESTMENT MANAGEMENT and the complete exit by SANDS CAPITAL MANAGEMENT, alongside significant new buying from CAPITAL WORLD INVESTORS.
• Monitor upcoming institutional holding disclosures and analyst rating updates to discern if a clearer consensus emerges regarding $XP's investment thesis.