StoneCo, Pagseguro Drop as Morgan Stanley Slashes Forecasts
- Both stocks hit lowest intraday levels since November 2023
- Stragetists warns payments industry likely reached saturation
Attempts by the two companies to diversify into banking, credit and software are unlikely to have a significant impact on earnings.
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Shares in Brazilian fintechs StoneCo Ltd. and Pagseguro Digital Ltd., known as PagBank, tumble in New York after Morgan Stanley downgraded both stocks and slashed their earnings forecasts, warning that Brazil’s digital payments market had “likely reached saturation.”
Strategists led by Jorge Kuri cut the stocks to underweight from equalweight, saying the fast growth of Pix, the central bank’s instant-payment app, and the dominance of digital banks like Nubank could put significant pressure on growth.