XP Inc. (XP) shares tumbled 5.09% in pre-market trading on Tuesday, as investors reacted to cautious analyst reports. The significant drop comes amid a challenging environment for the Brazilian financial services platform.

The pre-market plunge appears to be triggered by two key analyst actions. Bank of America Securities maintained its Hold rating on XP stock, keeping its price target unchanged at $19. This rating suggests a neutral outlook on the company's near-term prospects. Additionally, HSBC cut its target price for XP from $25 to $24, further contributing to the negative sentiment surrounding the stock.

These analyst moves indicate growing concerns about XP Inc.'s valuation and future performance. While Bank of America's Mario Pierry noted XP's strong capital position, the maintained Hold rating implies limited upside potential. The lowered price target from HSBC, although a small reduction, adds to the cautious market view. Investors seem to be reassessing their positions in light of these analyst perspectives, leading to the significant pre-market sell-off.