XP Target of Unusually High Options Trading (NASDAQ:XP)

Key Points

• XP saw unusually high options activity: Traders purchased 11,816 call options, about 136% above the average daily volume of 5,014 calls.
• Analyst sentiment remains generally positive: XP has a consensus “Moderate Buy” rating and a $23.00 price target, with Itau BBA upgrading the stock to “outperform” and UBS maintaining a “buy” rating despite lowering its target to $25.
• Recent financial results exceeded expectations: XP reported quarterly EPS of $0.53 versus the $0.50 estimate and revenue of $943.55 million, up 8.3% year over year; shares rose 1% to $20.19.

XP Inc. (NASDAQ:XP - Get Free Report) saw unusually large options trading on Thursday. Traders bought 11,816 call options on the company. This is an increase of approximately 136% compared to the average daily volume of 5,014 call options.

Wall Street Analysts Forecast Growth

A number of analysts have weighed in on the stock. Itau BBA Securities upgraded shares of XP from a "market perform" rating to an "outperform" rating and set a $22.00 target price on the stock in a research report on Monday. Weiss Ratings lowered shares of XP from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, August 18th. Finally, UBS Group decreased their price target on XP from $28.00 to $25.00 and set a "buy" rating for the company in a research note on Wednesday, June 3rd. Four investment analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, XP presently has a consensus rating of "Moderate Buy" and a consensus price target of $23.00.

XP Stock Up 1.0%

XP stock traded up $0.20 during midday trading on Thursday, reaching $20.19. 1,759,524 shares of the company's stock traded hands, compared to its average volume of 5,856,918. The company has a quick ratio of 4.80, a current ratio of 4.80 and a debt-to-equity ratio of 0.07. The firm's fifty day moving average price is $16.69 and its 200-day moving average price is $17.92. XP has a 52 week low of $14.80 and a 52 week high of $23.13. The company has a market cap of $10.85 billion, a price-to-earnings ratio of 10.61, a P/E/G ratio of 0.54 and a beta of 1.08.

XP (NASDAQ:XP - Get Free Report) last issued its quarterly earnings data on Monday, August 17th. The company reported $0.53 EPS for the quarter, topping the consensus estimate of $0.50 by $0.03. The firm had revenue of $943.55 million during the quarter, compared to the consensus estimate of $935.15 million. XP had a return on equity of 22.19% and a net margin of 27.20%.The company's quarterly revenue was up 8.3% compared to the same quarter last year. During the same period in the prior year, the business posted $2.46 earnings per share. As a group, sell-side analysts forecast that XP will post 2.11 earnings per share for the current fiscal year.

XP declared that its board has authorized a stock repurchase program on Tuesday, May 19th that permits the company to buyback $0.00 in shares. This buyback authorization permits the company to reacquire shares of its stock through open market purchases. Stock buyback programs are generally a sign that the company's board believes its shares are undervalued.

Hedge Funds Weigh In On XP

Several large investors have recently modified their holdings of the business. EverSource Wealth Advisors LLC increased its position in shares of XP by 65.4% during the second quarter. EverSource Wealth Advisors LLC now owns 1,634 shares of the company's stock valued at $33,000 after buying an additional 646 shares during the period. Caitong International Asset Management Co. Ltd grew its stake in XP by 1,783.3% during the third quarter. Caitong International Asset Management Co. Ltd now owns 2,825 shares of the company's stock valued at $53,000 after acquiring an additional 2,675 shares in the last quarter. Aster Capital Management DIFC Ltd bought a new stake in XP during the 4th quarter worth approximately $55,000. Parallel Advisors LLC increased its holdings in XP by 117.3% during the 1st quarter. Parallel Advisors LLC now owns 3,288 shares of the company's stock worth $63,000 after acquiring an additional 1,775 shares during the period. Finally, Vestcor Inc purchased a new stake in XP in the 3rd quarter worth approximately $64,000. Hedge funds and other institutional investors own 59.15% of the company's stock.

About XP

XP Inc provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients.

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