UPDATE: Credit Suisse Downgrades StoneCo Ltd. (STNE) to Neutral

Credit Suisse analyst Daniel Federle downgraded StoneCo Ltd. (NASDAQ: STNE) from Outperform to Neutral with a price target of $22.00 (from $100.00).

The analyst comments "We reduce our DCF-based TP to USD22 (from USD100) to incorporate: (i) a higher Ke, (ii) a lower contribution from its credit product, and (iii) a sharp increase in financial expenses. For the same reasons, we reduce our net income estimate by 84% to BRL514mn, 7% margin, for 22E. We downgrade STNE to Neutral as it lacks clear catalysts, earnings momentum is poor, and its short-term P/E of 56x does not bring comfort. However, we believe that the long-term value of this still-strong business is undervalued and lowered estimates leave room for potential positive surprises."

For an analyst ratings summary and ratings history on StoneCo Ltd. click here. For more ratings news on StoneCo Ltd. click here.

Shares of StoneCo Ltd. closed at $15.93 yesterday.

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