PagSeguro upgraded to Buy into potential rate easing at HSBC

HSBC analyst Neha Agarwala last night upgraded PagSeguro Digital to Buy from Hold with a price target of $13, up from $10. Despite the “sluggish” volumes this year, Brazilian payment acquirers’ margins should benefit from expanding take rates, cost controls, and easing funding costs, the analyst tells investors in a research note. Given higher shares of prepayment revenues, the firm expects the company’s earnings to benefit if the Banco Central do Brasil were to embark on an easing cycle.