Shares of StoneCo (NASDAQ: STNE) climbed as much as 10.8% early Monday then settled to close up around 2% after analysts at Goldman Sachs upgraded the Brazilian banking and financial-services company.
In a note to clients early Monday, an analyst team led by Goldman Sachs' Tito Labarta upgraded the firm's rating on StoneCo to buy from neutral and raised its per-share price target on the stock to $21 from $12. Labarta also upgraded fellow Brazilian fintech stock PagSeguro (NYSE: PAGS) to neutral from sell.
Labarta singled out StoneCo in particular as Goldman's top pick in the Brazilian payments industry, arguing it's poised to outperform, given a combination of positive tailwinds from government-banking initiatives, declining interest rates, and stabilizing growth trends. The team also noted that StoneCo is more effectively diversifying its revenue sources, with software-segment revenue projected to increase to 15% of its total in 2027 (up from 13% last year).
Source Fool.com