PagBank upgraded to Outperform from In Line at Evercore ISI

Evercore ISI analyst Sheriq Sumar upgraded PagBank to Outperform from In Line with a price target of $18, up from $12. The firm sees several cyclical and secular tailwinds creating an inflection in revenue and earnings growth in 2024-2026, including accelerated TPV growth, stabilizing take rates, rising gross profit yields, rising client deposits, declining interest rates and reduced margin pressure. As Pag executes on its go-to-market strategy and prioritizes high value small-to-midsize business merchants by cross-selling value-added services and banking solutions, total payment volume, or TPV, growth will accelerate to 17% and 13% in 2024 and 2025, respectively, the analyst tells investors.