Bank of America Downgrades StoneCo (NASDAQ:STNE) to Neutral

Key Points

• Bank of America downgraded StoneCo from “buy” to “neutral” and maintained a $13 price target, which still implies about 15% upside from the previous close.
• Analyst sentiment on StoneCo remains mixed: several firms have recently cut ratings or price targets, and MarketBeat shows a consensus rating of “Hold” with a $15.58 average target price.
• StoneCo last reported EPS of $0.42, matching estimates, but revenue came in far below expectations; the stock opened at $11.30 and is trading well below its 12-month high of $19.95.

StoneCo (NASDAQ:STNE - Get Free Report) was downgraded by research analysts at Bank of America from a "buy" rating to a "neutral" rating in a report released on Wednesday, Marketbeat.com reports. They presently have a $13.00 price target on the stock. Bank of America's price target would suggest a potential upside of 15.04% from the company's previous close.

Other equities research analysts have also recently issued reports about the company. Citigroup cut StoneCo from a "buy" rating to a "neutral" rating and dropped their price target for the company from $18.00 to $11.00 in a report on Friday, May 15th. Weiss Ratings downgraded shares of StoneCo from a "hold (c)" rating to a "hold (c-)" rating in a research report on Thursday, June 18th. BTIG Research lowered their price objective on shares of StoneCo from $22.00 to $15.00 and set a "buy" rating for the company in a research report on Friday, May 15th. Finally, JPMorgan Chase & Co. dropped their target price on shares of StoneCo from $20.00 to $16.50 and set an "overweight" rating for the company in a research note on Wednesday, May 27th. Four research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat, the stock has a consensus rating of "Hold" and a consensus target price of $15.58.

StoneCo Price Performance

NASDAQ:STNE opened at $11.30 on Wednesday. The firm has a market cap of $2.81 billion, a PE ratio of 4.52, a price-to-earnings-growth ratio of 0.20 and a beta of 1.73. StoneCo has a 12 month low of $9.45 and a 12 month high of $19.95. The company has a quick ratio of 1.33, a current ratio of 1.33 and a debt-to-equity ratio of 0.57. The company's 50-day moving average price is $10.84 and its two-hundred day moving average price is $13.49.

StoneCo (NASDAQ:STNE - Get Free Report) last posted its quarterly earnings data on Wednesday, May 13th. The company reported $0.42 earnings per share for the quarter, hitting the consensus estimate of $0.42. StoneCo had a net margin of 23.82% and a return on equity of 21.05%. The company had revenue of $141.16 million during the quarter, compared to analyst estimates of $675.11 million. On average, equities analysts anticipate that StoneCo will post 2.31 EPS for the current fiscal year.

Insider Activity

In related news, Director Silvio Jose Morais sold 9,000 shares of StoneCo stock in a transaction on Friday, June 12th. The stock was sold at an average price of $11.29, for a total transaction of $101,610.00. Following the completion of the sale, the director directly owned 21,000 shares of the company's stock, valued at $237,090. The trade was a 30.00% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link.

Institutional Trading of StoneCo

Institutional investors and hedge funds have recently modified their holdings of the stock. Blue Trust Inc. grew its holdings in StoneCo by 11,473.3% during the fourth quarter. Blue Trust Inc. now owns 1,736 shares of the company's stock valued at $26,000 after purchasing an additional 1,721 shares during the period. Kestra Advisory Services LLC acquired a new position in shares of StoneCo in the 4th quarter valued at $28,000. Advisory Services Network LLC bought a new stake in shares of StoneCo in the 3rd quarter valued at $37,000. Rockefeller Capital Management L.P. raised its stake in StoneCo by 74.1% during the 4th quarter. Rockefeller Capital Management L.P. now owns 2,199 shares of the company's stock worth $33,000 after buying an additional 936 shares during the period. Finally, Ensign Peak Advisors Inc bought a new position in StoneCo during the fourth quarter worth about $33,000. 73.19% of the stock is owned by institutional investors.

About StoneCo

StoneCo Ltd., commonly known as Stone, is a Brazilian financial technology company that provides integrated digital payment solutions and related financial services to merchants. Through its cloud-based platform, Stone enables businesses of all sizes to accept a variety of payment methods, including point-of-sale (POS) terminals, mobile card readers and e-commerce gateways. In addition to payment acceptance, the company offers value-added services such as working capital loans, digital banking products and automated billing tools designed to help merchants manage cash flow and streamline operations.

Since its founding in 2012 by André Street and Eduardo Pontes, Stone has focused on serving over half a million merchants across Brazil's retail, restaurant and services sectors.

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