Stoneco’s Strategic Shift to Time Deposits and SCFI License Boosts Buy Rating

Susquehanna analyst James Friedman has reiterated their bullish stance on STNE stock, giving a Buy rating yesterday.

James Friedman has given his Buy rating due to a combination of factors that suggest a positive outlook for Stoneco. The company has recently increased its use of the SCFI license, allowing it to offer time deposits to customers, which is a strategic shift from the more basic demand deposits. This change is expected to lead to a reduction in financial expenses due to a lower cost of funding and an increase in float revenues as part of a cash sweep strategy.
Additionally, in the context of rising interest rates in Brazil, Stoneco’s strategy of diversifying its funding sources and potentially increasing prices positions it well to maintain competitiveness. The expected financial benefits from the shift in deposit types and the strategic use of the SCFI license are anticipated to enhance Stoneco’s earnings before taxes in the coming quarters, supporting the Buy rating.

In another report released yesterday, Banco Santander also upgraded the stock to a Buy with a $16.00 price target.