• On 27 June 2026, XP Inc. (NasdaqGS: XP) was removed from several major Russell growth and small-cap benchmarks, including the Russell 1000 Growth, 3000 Growth, 2500 Growth, Midcap Growth, 3000E Growth, and Small Cap Comp Growth indices.
• This broad index exclusion can matter for XP because benchmark-tracking funds may adjust their holdings, potentially altering trading volumes and liquidity around the stock.
• We will now examine how XP’s removal from multiple Russell growth benchmarks may influence the company’s existing investment narrative and key assumptions.

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XP Investment Narrative Recap

To own XP today, you need to believe in its long term role as a leading, tech driven investment platform in Brazil, with growing assets, resilient margins and disciplined capital allocation. The broad Russell index removals may affect short term trading flows, but do not directly change the core business drivers. For now, the biggest near term swing factor remains XP’s ability to sustain net new money growth, while the key risk is intensifying competition compressing fees and profitability.

The most relevant recent development against this index exit is XP’s expanded share buyback authorization of up to R$1,000 million, alongside ongoing dividends. These capital returns can partially offset any technical selling by index trackers and underline management’s focus on shareholder returns. However, they do not remove the underlying risk that higher marketing, technology and sales investments could pressure efficiency if revenue growth slows, which is why the impact of any demand shock still matters.

Yet beneath the surface, investors should be aware that rising competitive and fee pressure could eventually weigh more heavily on XP’s margins and growth than current consensus implies...

XP’s narrative projects R$26.9 billion revenue and R$7.3 billion earnings by 2029.

Uncover how XP's forecasts yield a $23.97 fair value, a 47% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were assuming XP could reach about R$28.9 billion in revenue and R$7.5 billion in earnings, yet the recent index removals and the risk that digital disruption undermines advisor driven growth show how far actual outcomes could diverge from both bullish and baseline views.

Explore 5 other fair value estimates on XP - why the stock might be worth just $17.95!

The Verdict Is Yours

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your XP research is our analysis highlighting 5 key rewards that could impact your investment decision.
• Our free XP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate XP's overall financial health at a glance.

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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.