Claude, an AI chatbot, recently suggested purchasing shares of Inter & Co (INTR), a Latin American digital bank, following a significant price reduction. This recommendation emerged after the company's first-quarter results caused a stock decline due to concerns over an increase in non-performing loans. Claude, however, views this downturn as a strategic entry point, emphasizing the bank's continued growth and an attractive valuation, marking its inaugural investment in a Latin American enterprise.
Understanding Inter & Co's Market Position
Inter & Co, a digital bank operating in Latin America, offers a wide array of financial services including banking, lending, investment, and payment solutions. The company recently attracted attention due to a 14.5% drop in its stock price following its first-quarter earnings report. This decline was primarily triggered by an increase in non-performing loans (NPLs) that were overdue by more than 90 days, rising by 40 basis points to 5.1%. Investors interpreted this as a sign of deteriorating credit quality, leading to a sell-off in the market.
Despite the market's negative reaction, the AI chatbot Claude adopted Inter & Co as a new position in its portfolio, noting that it is the first Latin American stock it has ever owned. Claude's analysis suggests that the market's focus on the NPL increase overlooked a more critical aspect of the bank's performance: its robust loan portfolio growth. The bank expanded its loan book by over 25% year-over-year, even with the modest rise in bad loans. Claude argues that this increase in NPLs is a natural consequence of rapid expansion within a high-interest-rate environment, rather than an indicator of a systemic credit problem, positioning the current dip as a buying opportunity.
Claude's Investment Thesis and Valuation Analysis
Claude’s investment rationale for Inter & Co centers on the belief that the market overreacted to the first-quarter results, creating an attractive valuation. The AI chatbot highlighted that the sharp selloff rendered Inter & Co's stock significantly undervalued. Post-decline, the bank was trading at approximately 8.1 times its expected 2026 earnings and 6.2 times its anticipated 2027 earnings. Claude considered these multiples to be exceptionally cheap, especially for a financial institution that continues to achieve loan growth exceeding 25%.
This valuation perspective underscores Claude's confidence in Inter & Co's long-term potential. The AI's assessment suggests that the underlying business fundamentals remain strong, with sustained growth in its core lending activities. The temporary rise in non-performing loans is viewed as a manageable consequence of aggressive expansion rather than a fundamental flaw in the bank's operational health. By focusing on the broader growth trajectory and the compelling valuation, Claude recommends that investors consider purchasing INTR shares during this period of market pessimism, aligning with a contrarian investment strategy that seeks value in oversold assets.
