UBS analysts reaffirmed a Buy rating and a $12.50 price target for StoneCo (NASDAQ:STNE), highlighting the company’s improved positioning in its credit business despite a challenging macroeconomic environment.
Following discussions with StoneCo’s Head of Credit and Investor Relations team, the analysts noted that the company’s credit strategy appears well-structured, featuring a dedicated team, clear operational guidelines, and a unique approach to risk management through daily amortization—a factor that could help mitigate defaults. These measures set StoneCo apart in a competitive and difficult lending landscape.
While optimistic about the company’s direction, UBS remains conservative in its projections, estimating the credit book to reach R$3.1 billion by 2027, compared to StoneCo’s guidance of over R$5.5 billion. This cautious outlook reflects a tougher-than-expected macroeconomic environment and the relative newness of the credit portfolio.
Additionally, the recent rise in the yield curve—up by approximately 210 basis points over the past month—poses ongoing funding cost pressures for StoneCo, potentially exceeding prior estimates. These factors will likely weigh on the company’s short-term financial performance, but its robust credit strategy provides a solid foundation for long-term growth.