Assessing Inter & Co (INTR) Valuation After Claude AI Portfolio Addition And Rising Non‑Performing Loans

Inter & Co (INTR) is back on investors’ radar after Claude AI added the Brazilian digital bank to its portfolio, following a share price drop linked to higher non-performing loans.

See our latest analysis for Inter & Co.

The recent move by Claude AI comes after a period of share price pressure, with Inter & Co’s latest close at US$6.17 and the stock down 18% on a 30 day share price return and 27% year to date. The 3 year total shareholder return of 112% highlights how sentiment has shifted over different timeframes as investors reassess both loan growth and credit risk.

If this kind of reassessment has you thinking more broadly about opportunities in financials and beyond, it could be a good time to scan for other banks and fintechs with strong execution by checking out 20 top founder-led companies

So with Inter & Co’s share price under pressure, solid reported revenue and net income, and a value score of 5, are you looking at a discounted digital bank or a stock where the market already prices in future growth?

Most Popular Narrative: 81.5% Undervalued

According to the most followed narrative on Inter & Co, the fair value sits at $33.30 compared with the recent close at $6.17, a wide gap that rests on ambitious long term profitability targets.

At the beginning of 2023, Inter surprised those who did not follow the thesis in the market by disclosing its 60/30/30 Plan, which is a set of company guidelines for the year 2027. The company's goal is to reach 60 million customers, an efficiency index (expenses/revenues) of 30% and a return on equity (ROE) of 30%. In addition, a profit goal of R$ 5 billion and a goal of reaching R$ 100 billion in your credit portfolio were disclosed.

Read the complete narrative.

Curious how a digital bank gets from today’s profitability to that kind of valuation gap? The narrative leans on faster revenue growth, rising margins and a richer credit portfolio mix to justify that price tag, but the exact trade offs between growth, efficiency and returns only become clear when you see the full set of assumptions.

Result: Fair Value of $33.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Inter & Co keeping credit quality in check and executing the 60/30/30 plan without cost of risk or efficiency targets slipping.

Find out about the key risks to this Inter & Co narrative.

Next Steps

With bulls focused on rewards and bears pointing to risks, it is worth moving quickly to weigh both sides yourself by checking 4 key rewards and 2 important warning signs

Looking for more investment ideas?

If you are weighing Inter & Co and do not want to miss other potential setups, now is the time to scan broader opportunities with targeted screeners.

• Prioritise stability by checking companies highlighted in the 63 resilient stocks with low risk scores that focus on resilience and lower risk profiles.
• Hunt for opportunities where quality and price still line up by reviewing the 46 high quality undervalued stocks.
• Spot companies with stronger financial footing by using the solid balance sheet and fundamentals stocks screener (46 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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