Inter&Co upgraded to Buy on path to profitability at Citi

Citi analyst Rafael Frade upgraded Inter&Co to Buy from Neutral with a price target of $5.30, up from $2. The analyst says the company has been signaling its intention to reach higher return on equity via the repricing of its credit portfolio and keeping expenses under control. The firm believes the Q2 results “show good advances in this direction,” with potential further improvements in net interest margin coming from new initiatives and lower rates. In addition, Inter&Co’s cost-of-risk could present material improvement from higher restrictions on credit card origination, contends Citi. It is now more confident on the company’s ability to deliver improving returns in coming quarters.