Stoneco’s Strategic Positioning and Growth Potential Justify Buy Rating with 42% Upside

Bank of America Securities analyst Mario Pierry has reiterated their bullish stance on STNE stock, giving a Buy rating on April 4.

Mario Pierry has given his Buy rating due to a combination of factors that highlight Stoneco’s strategic financial positioning and growth potential. The company’s management has shown commitment to long-term financial guidance, aiming for a non-GAAP net income of over R$4.3 billion by 2027, which represents a three-year compound annual growth rate of 25%. This target is notably higher than the current market consensus, indicating potential undervaluation by the market.
Furthermore, Stoneco’s efforts to reprice and improve funding costs are expected to offset higher financial expenses in the coming years. The company is also focusing on efficient capital allocation, having completed a significant portion of its buyback program, and is expected to maintain a disciplined approach to client segments that require high capital but yield low returns. These strategic initiatives, along with a raised price objective to $15, suggest a significant upside potential of 42%, reinforcing the Buy rating.

According to TipRanks, Pierry is an analyst with an average return of -9.4% and a 28.00% success rate. Pierry covers the Financial sector, focusing on stocks such as Banco Santander Brasil, Itau Unibanco, and Grupo Supervielle SA.

In another report released on April 4, UBS also maintained a Buy rating on the stock with a $15.00 price target.