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

Key Points

• Unusual options activity: Investors bought 13,165 call options on XP on Friday — a 212% increase versus the average call volume of 4,223.
• Recent financials and valuation: XP reported Q results with $0.46 EPS (vs. $0.45 estimate) and $806.08M revenue (up 10.3% YoY), and the stock trades around $20.15 with a P/E of 11.66 and a market cap of about $10.8B.
• Analyst and institutional sentiment: The consensus is a "Moderate Buy" with an average target of $22.86 (UBS at $28), and institutional investors own roughly 59.15% of the company with several funds recently increasing stakes.

XP Inc. (NASDAQ:XP - Get Free Report) saw some unusual options trading activity on Friday. Investors bought 13,165 call options on the stock. This is an increase of 212% compared to the average volume of 4,223 call options.

XP Stock Performance

Shares of NASDAQ:XP traded up $0.24 during trading on Friday, hitting $20.15. The company's stock had a trading volume of 2,768,386 shares, compared to its average volume of 6,684,990. The company has a 50-day moving average of $19.72 and a 200-day moving average of $18.49. XP has a 12 month low of $12.79 and a 12 month high of $23.13. The company has a debt-to-equity ratio of 0.01, a current ratio of 5.36 and a quick ratio of 6.12. The firm has a market cap of $10.83 billion, a price-to-earnings ratio of 11.66, a P/E/G ratio of 0.64 and a beta of 1.26.

XP (NASDAQ:XP - Get Free Report) last issued its quarterly earnings data on Friday, February 13th. The company reported $0.46 earnings per share for the quarter, topping the consensus estimate of $0.45 by $0.01. XP had a net margin of 27.51% and a return on equity of 23.08%. The firm had revenue of $806.08 million for the quarter. During the same quarter last year, the company earned $2.23 EPS. XP's revenue for the quarter was up 10.3% on a year-over-year basis. On average, sell-side analysts expect that XP will post 1.36 earnings per share for the current year.

Wall Street Analysts Forecast Growth

XP has been the topic of several recent analyst reports. Jefferies Financial Group started coverage on XP in a report on Monday, January 19th. They issued a "buy" rating and a $22.00 target price for the company. Weiss Ratings restated a "hold (c)" rating on shares of XP in a research note on Monday, December 29th. UBS Group upped their target price on shares of XP from $25.00 to $28.00 and gave the company a "buy" rating in a research note on Thursday, April 2nd. Finally, Zacks Research upgraded shares of XP from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, March 3rd. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and three have issued a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $22.86.

Institutional Investors Weigh In On XP

A number of institutional investors and hedge funds have recently added to or reduced their stakes in XP. ARGA Investment Management LP raised its stake in XP by 119.2% during the 4th quarter. ARGA Investment Management LP now owns 19,900,087 shares of the company's stock worth $325,764,000 after acquiring an additional 10,820,050 shares during the period. Orbis Allan Gray Ltd bought a new stake in XP during the 2nd quarter worth approximately $161,639,000. Schroder Investment Management Group raised its stake in XP by 74.4% during the 3rd quarter. Schroder Investment Management Group now owns 12,288,191 shares of the company's stock worth $230,895,000 after acquiring an additional 5,240,306 shares during the period. Norges Bank purchased a new stake in XP during the 4th quarter valued at approximately $80,196,000. Finally, Ninety One UK Ltd grew its holdings in XP by 201.4% during the 3rd quarter. Ninety One UK Ltd now owns 5,652,624 shares of the company's stock valued at $106,213,000 after buying an additional 3,776,988 shares in the last quarter. 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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