UPDATE: Citi Upgrades StoneCo Ltd. (STNE) to Buy
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Citi analyst Gabriel Gusan upgraded StoneCo Ltd. (NASDAQ: STNE) from Neutral to Buy with a price target of $15.00 (from $18.00).
The analyst comments "We are upgrading Stone to Buy following the company's 4Q21 results. Over the past year, STNE shares have dropped by 86% after disappointing in its initiatives, but also due to the strong sell-off in global fintech stocks. At this point, we think valuation looks attractive, as we believe positive trends for the business such as take rate expansion and strong client additions indicate stronger short-term results than market expected, which was corroborated by the guidance for 1Q22 and positive message for 2022. Moreover, we believe there is still a valid opportunity in growing the offer of software and the reinstatement of the credit product, even if much smaller than estimated in the past. STNE is currently trading at 26x adjusted P/E'22E and 12x '23E. We are setting our new target price at US$15, vs US$18 before."
Shares of StoneCo Ltd. closed at $9.61 yesterday.
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