StoneCo stock rises after upgrade to Overweight at J.P. Morgan

StoneCo (NASDAQ:STNE) stock advanced 3.1% in Thursday morning trading after J.P. Morgan upgraded the Brazilian payment technology company to Overweight from Neutral.

Supporting the upbeat coverage is an appealing earnings growth potential (that is, an estimated 20% 2023-2027 compounded annual growth rate) and a discounted valuation of nine times 2025 estimated price-to-earnings.

Since posting its Q1 earnings in mid-May, STNE has retreated some 20%. The quarterly results “were polluted by several one-off items but overall were in line to our estimates,” analyst Yuri Fernandes wrote in a note.

“We believe Stone (STNE) re-rating depends mostly on banking deliveries (i.e., deposits and healthy credit growth) rather than macro environment,” he added.

JPM’s Buy rating diverges from the SA Quant system rating of Hold and agrees with the average Wall Street analyst rating of Buy.