JPM downgrades PagSeguro to 'neutral' on payment volumes deceleration

PagSeguro Digital

29/11/2022 07:58

** J.P.Morgan downgrades U.S.-listed shares in Brazilian
fintech company PagSeguro Digital Ltd  PAGS.N  to "neutral" from
"overweight" on large deceleration of payment volumes 
    ** Says it is hard to have a constructive view on payment
companies and other levered players with higher Selic interest
rates
    ** Adds persistent asset quality deterioration should drive
credit card growth down, as it started weighing on banks' risk
appetite 
    ** Believes while PAGS should be less impacted amid a
deteriorating competitive environment, higher rate environment
should continue to be a headwind to funding costs  
    ** Broker expects large total payment volume (TPV) slowdown
for the entire industry and sees as concerning investor
expectations of accelerating TPV next year
    ** Also trims PT to $12 from $16 
    ** Ten of 20 brokerages rate the stock "buy" or higher,
while the other half "hold"; their median PT is $20
    ** Up to last close, shares down ~62% so far this year
 (Reporting by Roshan Abraham in Bengaluru)
 ((Roshan.Abraham@thomsonreuters.com))