HSBC last night upgraded StoneCo to Buy from Hold with a price target of $15, up from $11. 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.
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