Why Morningstar Sees Opportunity in LPL, Fiserv and Nu

Financial stocks have lagged the broader market in 2026, but Morningstar’s Sean Dunlop sees three very different businesses where pessimism may have gone too far: LPL Financial, Fiserv and Nu Holdings. The common thread is not a single sector catalyst. It is the gap between depressed expectations and each company’s ability to prove that a specific problem is manageable.

LPL Financial’s challenge is its dependence on client cash balances. Cash sweep programs generate roughly 30% to 35% of gross profit, according to the original report, and investors worry that artificial intelligence-enabled tools could help advisers move idle cash into higher-yielding alternatives. Morningstar’s $543 fair-value estimate assumes LPL can either defend that economics or develop another way to monetize client cash. LPL’s second-quarter results provide a separate operating checkpoint: asset growth and adviser productivity need to translate into sustained organic net new asset growth.

Fiserv faces a more traditional execution test. Morningstar calls 2026 a reset year and argues that the company still benefits from scale in merchant acquiring and issuer processing, plus high switching costs in bank technology. The firm’s $106 fair-value estimate implies that Clover can keep monetizing small-business customers and that companywide growth can settle at a mid-single-digit rate with stable margins. Fiserv’s own second-quarter release is useful because it lets investors compare that thesis with reported merchant and financial-solutions performance rather than relying only on the valuation call.

Nu Holdings carries the most direct credit risk of the three. The digital bank has built a large, low-cost customer base in Brazil and is expanding elsewhere in Latin America. Morningstar’s $16.60 estimate assumes that the market is discounting the company too heavily for inflation, unemployment and credit-quality concerns. Nu’s quarterly disclosure on customers, revenue, deposits and delinquency trends will show whether growth is still producing attractive risk-adjusted returns.

These are not interchangeable value stocks. LPL must protect a profit pool tied to cash, Fiserv must stabilize operations, and Nu must grow without allowing loan losses to outrun revenue. Morningstar’s upside estimates are therefore starting points, not evidence that the risks have passed.

The useful comparison is whether each company’s next results close the specific gap between the market’s concern and management’s execution.